Pump.fun AMM Rumors Trigger 28% Decline in Raydium Token (RAY) Price

Pump.fun, the widely used Solana-based meme coin launchpad, is reportedly testing an automated market maker (AMM) that could shift how tokens launched on its platform handle liquidity.

If implemented, this development might reduce the platform’s reliance on Raydium, the decentralized exchange that currently facilitates trading for tokens graduating from Pump.fun.

Pump.fun May Ditch Raydium By Launching its own Internal AMM System

The first indications of an in-house AMM surfaced when Aggr News, an X-based news aggregator, spotted a new liquidity pool under the domain amm.pump.fun.

https://t.co/wohP4puuSl TESTING IN-HOUSE AMM, POTENTIALLY REPLACING RAYDIUM AS THIRD PARTY PROVIDER: WEBSITE pic.twitter.com/VLavRsRHFQ

— Aggr News (@AggrNews) February 24, 2025

This internal test suggests Pump.fun may be preparing to host its own liquidity pools rather than directing traffic to Raydium.

The information gained traction after an X user, “trenchdiver,” claimed on February 24 that Pump.fun was actively working on its own AMM system.

EXCLUSIVE : @pumpdotfun is working on their own AMM liquidity pools, which is currently being tested on https://t.co/nuir86gnkl

It seems they are planning to have pump tokens graduate to their own pools instead of Raydium so they can either extract more fees on Solana or have… pic.twitter.com/svmWfl6Rlt

— trenchdiver (@trenchdiver101) February 24, 2025

The feature would allow users to trade assets directly against liquidity locked in smart contracts rather than through a traditional counterparty model.

A link shared by the user leads to a website displaying an AMM interface with Pump.fun’s branding, indicating that the feature is in beta testing.

Currently, when a token on Pump.fun completes its bonding curve—a structured pricing model—it transitions to Raydium for trading.

If Pump.fun launches its own AMM, it could keep that liquidity within its own ecosystem instead of directing it elsewhere.

Further speculation emerged after an onchain transaction dated February 20 showed what appears to be Pump.fun’s first test token added to its AMM liquidity pool.

The token, named Snowfall (CRACK), seemingly a reference to a 2017 TV series, saw a sharp rise, reaching a peak market capitalization of $5.4 million within an hour of Trenchdiver’s post, as reported by DEX Screener.

However, its value has since experienced heavy fluctuations, with a 40% decline in price bringing its market capitalization down to approximately $1.8 million.

Despite mounting speculation, Pump.fun has not made any public statements regarding the AMM’s development or its potential impact on the platform’s token graduation process.

Pump.fun’s AMM Plans Hit Raydium Hard—RAY Down 22%, Could Lose 50% of Volume

Raydium’s RAY token dropped 22% to $3.28 amid speculation that meme coin launchpad Pump.fun may launch its own automated market-making (AMM) system. Over the past hour, RAY fell another 5%, according to Coingecko.

If Pump.fun moves forward, Raydium could see a 30-50% drop in trading volume, which would impact its market position. Currently, projects pay 6 SOL (about $950) to transition their tokens to Raydium’s trading pools, but Pump.fun may introduce competitive fees.

Pump.fun has grown rapidly, processing over $5.3 million in daily fees at its peak. However, only 1.4% of tokens launched on the platform currently make it to Raydium’s pools, and fewer than 100 have surpassed a $1 million market cap.

Speculation is also growing about potential new features like meme coin perpetuals and lending, adding uncertainty to Raydium’s future dominance in Solana’s ecosystem.

⚖️ @pumpdotfun is hit with a cease and desist letter from Burwick Law over 200+ IP-infringing meme coins and allegations of market manipulation.#Pump.fun #BurwickLawhttps://t.co/JsMFC1yUia

— Cryptonews.com (@cryptonews) February 6, 2025

Meanwhile, Pump.fun faces legal trouble. Burwick Law filed a second class-action lawsuit on Jan. 16, accusing it of selling unregistered securities, including the PNUT token, which once hit a $1 billion market cap. Filed in New York, the case claims the platform enables Ponzi-like schemes while lacking investor protections.

Looking ahead, if the rumors about Pump.fun turn out to be true, it could challenge the dominance of Solana’s largest liquidity pool, potentially leading users to move to the new platform, especially considering that Pump.fun remains the biggest meme coin creation tool on Solana.