Key Takeaways
- Pump.fun has launched its own decentralized exchange called PumpSwap. Users can trade the mem coins launched on the platform without paying any fees.
- he developers envision PumpSwap as a platform to create a frictionless environment for trading Solana meme coins at zero transaction cost.
- Solana plans to counter the increased competition and bring back the trading volume to its meme coin launchpad with the introduction of a revenue-sharing program with the creators.
Pump.fun, the cryptocurrency launchpad for Solana-based meme coins, has launched its own decentralized exchange called PumpSwap. With this launch, the Pump.fun users can trade the mem coins launched on the platform without paying any fees. The process will become more seamless compared to what was followed when Raydium was used for the Solana token trade.
The PumpSwap will launch on March 20, 2025, and meme coins launched on the platform will be directly migrated to the PumpSwap DEX. The developers envision PumpSwap as a platform to create a frictionless environment for trading Solana meme coins at zero transaction cost; earlier, with the Raydium exchange, each transaction cost 6 SOL. PumpSwap will soon launch a new program to share the revenue with the creators.
With the PumpSwap, users can trade assets other than Solana meme coins such as $PENGU, $APT, $TRON, cbBTC, $USDe, $frxUSD, $FXS, $SEI, $JUP, $ZRO, $MNDE, $MPLX, $DRIFT, $PLUME, $RETARDIO, $SAVE, $SCR, $OX, and $W.
Raydium’s LaunchLab Versus Solana’s Pump.fun
Solana’s efforts to create its own DEX for meme coin trade are a response to Raydium’s plans to create its own meme coin launchpad, LaunchLab. Raydium’s LaunchLab is thought to directly compete with Solana’s Pump.fun. From trading partners, Solana and Raydium have transitioned to competitors, with each having its own meme coin launchpad and DEX (decentralized exchange) for meme coin trade.
While the competition is good for the meme coin users, this development has affected the two blockchains individually with Solana facing a downward trend in its trading volume. Solana’s downfall in the market is also due to the influx of other players in the market such as Daos.fun, GoFundMeme, and Pumpkin.
Solana plans to counter the increased competition and bring back the trading volume to its meme coin launchpad with the introduction of a revenue-sharing program with the creators. With the revenue-sharing program, creators of meme coins on Pump.fun will get a higher reward for creating meme coins in Pump.fun and trading them through the PumpSwap exchange. With the launch of this program, Solana aims to bring back the lost trading volume on Pump.fun.
Declining Meme Coin Activity On Pump.fun
The increased competition has caused a drastic decline in meme coin activity on the Pump.fun platform. The trading volumes of meme coins saw a nearly 80% decline from their trading levels in January during the first week of March. The platform’s revenue from fees also declined from the January level of $4 million to nearly $1 Million in mid-March. The fall was drastic compared to the explosive growth in the trading volume of Solana meme coins in the market; Solana’s total value locked (TVL) increased from around $1.4 billion to more than $9 billion in 2024 due to the positive performance of meme coins.
Solana has to devise new ways to counter the competition put forth by Raydium’s Launchpad and other meme coin generators to bring back the trading volume it had in the previous months.
The Bottom Line
Pump.fun’s PumpSwap DEX is an attempt to challenge Raydium with its novel token migration strategy. PumpSwap has a similar interface as Raydium and Uniswap DEXs. So it would be easy for users to migrate to this DEX. PumpSwap also provides users with the facility to create new liquidity pools, join existing pools, and trade any tokens listed on the platform. Pump.fun aims to bring into effect frictionless trading through the newly launched DEX, thus making Solana meme coins a prominent contributor to the overall cryptocurrency market.