Author: Techub Hot Spot Express Written by: Yangz, Techub News

Nearly one month after the rumors that Pump.fun will develop its own AMM, this Solana ecosystem leader Memecoin distribution platform officially announced the launch of its native DEX-PumpSwap. In addition to the news that Raydium, which Blockworks revealed earlier this week, will also launch the native Memecoin distribution platform LaunchLab, the former "comrades-in-arms" have become "opponents", and the battle for the Solana Memecoin market has officially begun.

When talking about the relationship between Pump.fun and Raydium, it was actually a mutually beneficial symbiosis at first. Pump.fun's Memecoin issuance mechanism can be roughly divided into two stages. The first is the "inner trading" stage, relying on its own Bonding Curve mechanism (simplely speaking, the higher the token price, the more tokens released) for transaction matching. When the token trading volume reaches US$69,000 and successfully "graduate", it enters the "foreign trading" stage. At this time, liquidity will move to Raydium and continue to open trading, and Raydium will charge a 6 SOL listing fee. It can be said that the "inside" phase of Pump.fun provides early price discovery for tokens, and by transferring to the number one TVL DEX on Solana, it introduces a natural market balance mechanism for these Memecoins, which to some extent helps to alleviate the extreme price fluctuations that may be brought about by a single curve model.

Data released by Blockworks Research shows that since the second quarter of last year, a large part of Raydium's revenue has come from transaction fees of Pump.fun Memecoin, of which 53% in the fourth quarter of last year (Raydium charges a 0.25% handling fee from each transaction). Despite a slight decline in the first quarter of this year (as of February 23), the share still reached 44%. In addition, DefiLlama data shows that thanks to the boom in Solana Memecoin last year and the popularity of Pump.fun, Raydium's daily trading volume soared from about $245 million to more than $2 billion during 2024.

So, why did this couple who once "helped each other" "travel separately"?

Pump.fun said in his official tweet today, "From the first day, our goal is to create the most frictionless token trading environment. The migration of token liquidity will slow down the development momentum of tokens and bring unnecessary complexity to new users. Now, the migration can be carried out for free immediately." In addition, it is also investing in creating a more sustainable ecosystem. In the future, "a certain proportion of the agreement revenue will be shared with the token creators" (currently, each transaction on PumpSwap will charge a 0.25% handling fee, of which 0.2% is given to liquidity providers and 0.05% is assigned to the agreement. After the creator's income sharing function is launched, the fee allocation will change). Simply put, Pump.fun's move is intended to implement its original intention of "frictionless transactions" and at the same time ensure that "the fat and water will not flow to outsiders' fields."

Infra, anonymous core contributor of Raydium, also revealed in an interview with Blockworks that the agreement had actually started to develop LaunchLab "a few months ago", but it has been shelving the project because it did not want the Pump.fun team to think that Raydium is competing directly with them. It was not until the news broke out in the market that Pump.fun would develop its own AMM that Raydium realized that if he didn't act, he would probably "sit down and eat the whole country." Infra also pointed out that the popularity of Pump.fun is partly due to the solid infrastructure provided by Raydium, but it does not regard LaunchLab as a killer of pump.fun. "It just provides an alternative to Pump.fun users who don't want to develop programs from scratch and Pump.fun users who like to use Raydium's AMM v4 for liquidity pool migration."

Although neither side explicitly wants to confront the former "comrades" head-on, considering the fact that a series of scandals have caused the Solana Memecoin ecosystem to fall into a downturn, the market has already understood that "traveling separately" is nothing more than "All about money." DeFiLlama data shows that Pump.fun's transaction fees have been reduced to the $1 million level from the peak of about $15.38 million at the end of January this year, and Raydium's transaction fees have also dropped from the $30 million level to $600,000 to $700,000.

In my opinion, this is like a "survival war" about traffic and users amid the shrinking Memecoin market. As the Solana ecological Memecoin boom retreats, both sides are facing pressure from sharp revenue drops and user churn. But the problem is, with CZ bringing the popularity of BNB Chain ecosystem Memecoin and Solana itself is facing "external troubles", how much room does the current Memecoin market have to leave for them? The two will fight head-on against the backdrop of Solana's decline in traffic, which may only be a war of attrition.

Memecoin The popularity of the market is highly dependent on sentiment drive. Once the money-making effect fades, users often quickly turn to other hot spots. PumpSwap and LaunchLab are likely to be futile if they fail to provide enough appeal in this battle. Of course, one thing that cannot be ignored is that PumpSwap has not limited itself to Memecoin. It has expanded its support for token trading of multiple popular projects including PENGU, APT and TRON, in an attempt to expand its influence. As for LaunchLab, whether it will bring new mechanisms in addition to providing linear, exponential and logarithmic combination curves to match the demand and price of tokens, and allowing third-party user interfaces to set their own fees, will still need to wait for further announcements from Raydium and market feedback.

In the end, who can win in this survival battle depends not only on their subsequent actual performance, but also on the overall direction of the Solana ecology. If Solana's Memecoin narrative can heat up again, perhaps we will witness Raydium breaking Pump.fun's dominance in the "Solana Memecoin" field; or Pump.fun takes advantage of the momentum to further consolidate its leading position.