Raydium to Launch Memecoin Rival to Challenge Pump.fun

Raydium, Solana’s largest decentralized exchange (DEX), is gearing up to launch LaunchLab, a memecoin launchpad designed to compete directly with Pump.fun, according to Blockworks. The move comes after reports surfaced that Pump.fun is developing its own automated market maker (AMM), signaling a potential split from Raydium’s infrastructure.

The move signals a growing power struggle within Solana’s DeFi space. Memecoins have become a major revenue source for Raydium, with Pump.fun-generated tokens contributing 41% of its swap fees over the past 30 days. 

Why Raydium is Launching a Pump.fun Competitor

Raydium’s relationship with Pump.fun has been beneficial—but fragile. The current setup allows Pump.fun tokens that hit a $69,000 market cap to transition into Raydium’s trading pools, providing liquidity and revenue to the exchange. However, Pump.fun’s new AMM threatens to sever this link, pulling swap fees away from Raydium and disrupting its revenue model.

Raydium’s response? LaunchLab.

• Customizable bonding curves – Projects can choose linear, exponential, or logarithmic pricing models for their tokens.
• Flexible fee structures – Unlike Pump.fun, LaunchLab will allow third-party user interfaces (UIs) to set fees.
• Expanded token support – LaunchLab will enable launches with multiple quote tokens, not just SOL.
• Liquidity protection – It will integrate with Raydium’s liquidity provider locker, ensuring swap fees remain secure.

By offering a more versatile and decentralized alternative, Raydium hopes to retain developers and liquidity providers who might otherwise shift to Pump.fun’s ecosystem.

Pump.fun’s AMM Move Sparked the Conflict

Pump.fun’s rise has been meteoric. Launched in early 2024, it quickly became Solana’s go-to memecoin factory, driving millions in trading volume. But rumors of Pump.fun building its own AMM began circulating months ago.

When the news leaked last month, it triggered a sharp reaction in the market. Raydium’s native token, RAY, plummeted 25% in February, as investors feared a major loss of revenue once Pump.fun fully migrates to its own liquidity pools.

Even after the flash crash, Raydium holds $168 million on its balance sheet, according to Blockworks Research. 

Raydium’s core contributor, Infra, revealed that the exchange had been working on a launchpad for months but had kept it on hold to avoid direct competition with Pump.fun. That restraint ended the moment Pump.fun’s AMM plans became public.

How LaunchLab Differs from Pump.fun

While LaunchLab and Pump.fun share a similar bonding curve model, there are key differences:

Infra clarified that LaunchLab isn’t meant to kill Pump.fun but rather to offer an alternative for teams who prefer Raydium’s liquidity pools and AMM v4 infrastructure.

“LaunchLab isn’t about replacing Pump or any other platform — it’s an alternative for teams who don’t want to develop their own programs from scratch, and for Pump users who prefer Raydium’s AMM v4 for pool migrations,” Infra said.

The High-Stakes Battle for Memecoin Liquidity

The memecoin sector on Solana has become a key revenue driver for Raydium. In 2024 alone, Raydium generated $154 million in swap fees, with Pump.fun contributing a significant portion of that revenue.

But with Pump.fun pulling away, Raydium risks losing a major source of trading volume. The exchange is now betting on LaunchLab to keep liquidity within its ecosystem and attract new token launches.

At the same time, Pump.fun is facing its own challenges:

• Declining "graduation rates" – The percentage of Pump.fun tokens successfully transitioning to full tradability on Solana DEXs has dropped below 1% since February 17.
• Market correction – The broader crypto market downturn has hit memecoins hard, leading to lower trading activity.
• RAY’s price struggles – The 30% drop in RAY following the AMM rumors signals investor concerns about Raydium’s future revenue.

What’s Next?

Raydium’s LaunchLab is set to go live soon, and the battle for memecoin dominance on Solana is just heating up.

• If Pump.fun successfully migrates liquidity, Raydium could see a major decline in swap revenue.
• If LaunchLab gains traction, it could keep liquidity within Raydium’s pools, softening the blow of Pump.fun’s AMM.
• Both platforms could coexist, offering different models for token launches and liquidity management.