Raydium’s token (RAY) faced a steep decline on February 24 as whispers grow that the memecoin launchpad Pump.fun is crafting its own automated market maker (AMM) feature. This potential move may threaten Raydium’s position as a leading decentralized exchange (DEX) service on Solana.

The speculation started circulating from X (formerly known as Twitter) user trenchdiver, who alleged that Pump.fun is trialing AMM liquidity pools. Such technology permits direct cryptocurrency trades against liquidity supplied in smart contracts, thus removing the need for traditional counterparts.

Trenchdiver also unveiled a link to a beta interface featuring Pump.fun’s logo, hinting that the project may be in advanced stages.

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Pump.fun’s Bonding Curve Bridges Meme Coins to Raydium Trading

Currently, meme coins launched on Pump.fun that gain enough trading traction move to Raydium for extended trading, following a mechanism termed the “bonding curve.” However, should Pump.fun implement its AMM feature, these tokens could remain within its own ecosystem, potentially minimizing Raydium’s involvement.

“It appears they have plans for Pump tokens to transition to their own pools instead of depending on Raydium,” stated trenchdiver. This change could enhance Pump.fun’s ability to collect more fees or create rewards for its token holders.

EXCLUSIVE : @pumpdotfun is developing their own AMM liquidity pools, which is currently being tested on this link.

They seem to be planning for pump tokens to transfer to their own pools instead of Raydium so they can either extract more fees on Solana or… pic.twitter.com/svmWfl6Rlt — trenchdiver (@trenchdiver101) February 24, 2025

On-chain data from February 20 supports these claims, indicating that Pump.fun substantiated its first test token, Snowfall (CRACK), in its AMM liquidity pool. Named after a 2017 television series that chronicles the 1980s crack epidemic, this token’s market cap soared to $5.4 million within an hour after trenchdiver’s announcement. Nonetheless, the token displayed considerable volatility, with its market cap plummeting to $1.8 million subsequent to a 40% price decrease.

Pump.fun has yet to confirm any plans associated with developing an AMM, but the market’s reactions were immediate. Tyler Warner noted that Raydium’s token “fell off a cliff” in the aftermath of the news, declining by 25% to $3.22 within 24 hours according to CoinGecko data.

Currently, RAY is trading at $3.09, marking a drop of over 28% in the preceding day. Analysts warn that if RAY cannot maintain above the critical support level of $3.15, it might test the $3.00 threshold. A breach below $3.00 could permit further downward pressure aiming toward $2.85.

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Solana Surpasses Ethereum As Top Ecosystem for New Developers

As reported, Solana has overtaken Ethereum as the premier destination for new developers in 2024, ending Ethereum’s long-standing dominance in this field. Solana welcomed 7,625 new developers this year, exceeding Ethereum’s 6,456, largely driven by a surge in developer activity across Asia.

Solana’s growth momentum initiated in July when it officially outperformed Ethereum in onboarding new developers for the first time since 2016. This robust trend persisted through 2024, witnessing an 83% year-over-year growth in developer involvement.