Pump.fun has officially launched PumpSwap, its own decentralized exchange (DEX), marking a major shift in the Solana memecoin ecosystem. As of March 20, memecoins that successfully bootstrap liquidity on Pump.fun will no longer migrate to Raydium, which had been the dominant platform for trading these assets. Instead, they will now transition directly to PumpSwap for trading.
In an X post, Pump.fun explained that this move aims to remove friction and delays associated with liquidity migrations, streamlining the trading process for memecoin investors.
“Migrations were a major point of friction—they slowed a coin’s momentum and introduced needless complexity for new users. Now, migrations happen instantly and for free.”
PumpSwap is built to function similarly to Raydium V4 and Uniswap V2, ensuring a seamless trading experience while keeping liquidity within the Pump.fun ecosystem.
Raydium and Pump.fun: From Partners to Competitors
The launch of PumpSwap comes just days after Raydium announced its own memecoin launchpad, LaunchLab, a direct competitor to Pump.fun’s existing model.
Alon, a co-founder of Pump.fun, welcomed the competition, telling Cointelegraph:
“We welcome competition because users win at the end of the day.”
Beyond Raydium, several new players are emerging in Solana’s memecoin market, including Daos.fun, GoFundMeme, and Pumpkin, each vying for market share.
To stay competitive, Pump.fun plans to integrate a revenue-sharing model—a feature popularized by GoFundMeme—where a percentage of protocol revenue will be shared with coin creators.
“If it succeeds, millions of dollars will go toward aligning creators with their communities and incentivizing higher-quality launches.”
Declining Memecoin Activity Amidst Market Shifts
While competition is heating up, memecoin activity on Solana has significantly declined since January. Successful memecoin launches on Pump.fun have dropped by 80%, following a series of scandals that dampened retail enthusiasm.
According to DefiLlama, Pump.fun’s average daily fee revenue has plummeted from over $4 million in January to $1 million by mid-March.
Despite the slowdown, Solana’s total value locked (TVL) saw massive growth in 2024, surging from $1.4 billion to over $9 billion, largely driven by memecoin trading. Raydium was one of the biggest winners, with daily trading volumes increasing from $245 million to over $2 billion throughout the year.
What’s Next for Solana’s Memecoin Market?
With PumpSwap now live and Raydium launching LaunchLab, Solana’s DeFi ecosystem is in the midst of a major shake-up. The battle for dominance in memecoin trading is intensifying, and traders will be closely watching how these rival platforms innovate to attract liquidity.
As memecoin sentiment cools, the success of these platforms will likely depend on their ability to incentivize new projects, simplify trading, and offer unique benefits to users in a highly competitive DeFi landscape.