Raydium (RAY) Dips Following Pump.fun’s Rumored AMM – Is the Market Overreacting?

Date: Mon, February 24, 2025 | 09:05 AM GMT

In the cryptocurrency market today, Raydium (RAY), the Solana-based decentralized exchange (DEX) and automated market maker (AMM), has faced a sharp decline, with its native token plunging by nearly 30% according to latest data from coinmarketcap.

Source: Coinmarketcap

Rumors of Pump.Fun’s AMM

The sell-off appears to be driven by rumors that Pump.fun, a popular Solana-based memecoin launchpad, is testing its own automated market maker (AMM). If true, this could potentially replace Raydium as the default DEX for tokens graduating from Pump.fun, allowing the platform to capture more trading fees that would have otherwise gone to Raydium.

Source: trenchdiver (X)

While Pump.fun has yet to make any official announcement, the speculation alone has been enough to send Raydium’s token tumbling, sparking fears of reduced trading activity and fee generation for the platform.

Is the Market Overreacting?

Not everyone is convinced that the market reaction is justified. The crypto investor PiEDawg.eth took to X to share his perspective, arguing that the panic is unwarranted:

“This intense fear caused by Pump.fun doesn’t make any sense. The market is clearly overreacting, and you can see this in Raydium’s ($RAY) price action.”

Source: @PiEDawg_ ( X)

He pointed out that another Solana-based AMM, Orca, has only dropped 8%, while Raydium plunged 25%. Meanwhile, Pump.fun’s current trading volume accounts for only 10% of Raydium’s total volume, and just 1.4% of all tokens graduate from Pump.fun. Even if those 1.4% of tokens represented 50% of the trading volume, they would still only amount to 5% of Raydium’s total activity—far from a significant threat.

PiEDawg.eth believes that the current dip presents a buying opportunity rather than a reason to panic:
“In my opinion, this is actually bullish. It’s better to have the short-term, speculative pump-and-dump tokens on another platform while Raydium continues to build and service the broader Solana ecosystem.”

What’s Next for Raydium?

For now, the uncertainty surrounding Pump.fun’s rumored AMM remains just that—a rumor. Without an official confirmation, the market reaction may be premature and exaggerated.

If Pump.fun does move forward with its own AMM, the real impact on Raydium would depend on how much trading volume actually migrates away. However, Raydium remains a core pillar of the Solana ecosystem, with deep liquidity and strong developer backing.

With speculation driving the recent price drop, some investors may see this as a discounted entry point—especially if Raydium continues to expand its ecosystem and adapt to changing market conditions.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before investing in cryptocurrencies.