Original | Odaily Planet Daily (@OdailyChina)
PumpSwap Debuts: A New Battle in Solana DEX
On March 20, 2025, the meme coin launchpad platform Pump.fun announced the launch of PumpSwap, a decentralized token exchange service platform, which officially went live on March 21. In direct competition with automated market makers (AMM) like Raydium in the Solana ecosystem, PumpSwap is positioned as "the core infrastructure for permissionless trading of all tokens on Solana." This transformation not only expands the ecological boundaries of Pump.fun but may also reshape the competitive landscape of Solana DeFi. In the current context of declining platform revenue and user activity following the meme coin craze, is PumpSwap a lifeline or a new adventure?
The Dilemma of Pump.fun: From Peak to Plunge
Since its launch in January 2024, Pump.fun quickly became a leader in the meme coin craze with token creation fees as low as 0.02 SOL and the efficient characteristics of Solana. By March 2025, the platform had incubated over 1.5 million tokens and was once hailed as "the cradle of meme coins on Solana." However, that glory has become a thing of the past.
According to statistics from DefiLlama, the protocol revenue of Pump.fun on March 21, 2025, was only $889,000, a decline of over 94% compared to the peak of $15.38 million on January 25, and has fallen back to levels seen before September 2024.
Even more concerning is the persistent low "graduation rate" of tokens (the decline of the golden dog effect). In the ecosystem of Pump.fun, "graduation" refers to the transition of tokens from the incubation stage to a fully tradable state on Solana DEX, usually requiring specific liquidity and trading volume criteria. Data from Dune Analytics shows that since February 17, Pump.fun's graduation rate has remained below 1% for four consecutive weeks, far below the historical high of 1.67% in November 2023. At that time, the platform created 323,000 tokens in a week, with about 5,400 successfully entering the public market. Now, the number of tokens graduating each week has dropped to about 1,500, and the number of new tokens completing the "joint curve" has plummeted from nearly 1,200 on January 23-24 to about 200 on February 26, a decline of over 80%.
The root cause of this downturn is the retreat of the meme coin craze, further exacerbated by the meme coin frenzy on BNB Chain. In early 2025, platforms like Four.Meme emerged on BNB Chain, attracting a large number of meme coin projects and speculators due to low gas fees and a large user base. X user @DeFiPulse noted on March 15:
The trading volume of meme coins on BNB Chain surged by 150% in February, diverting traffic from Solana and causing Pump.fun's user activity to decline by over 60%.
Monitoring by Lookonchain on March 18 showed:
In the past 24 hours, six tokens created on Four.Meme had a market cap exceeding $1 million, while only one token on Pump.fun surpassed $1 million.
Additionally, the 2024 attack incident (resulting in a loss of $2 million) and frequent scams (such as the LIBRA collapse) have put Pump.fun in a dual crisis of trust and market, urgently needing a new growth engine.
The Innovation of PumpSwap: From Low Barriers to New Ecosystem
In the face of the current predicament, the launch of PumpSwap is seen as a strategic counterattack for Pump.fun. Its product not only continues the platform's low barrier gene but also attempts to reshape its role in the Solana ecosystem through a series of innovative features and technical upgrades.
First, the core features of PumpSwap are eye-catching. It reduces the cost of migrating tokens from Pump.fun to the trading environment from the original 6 SOL to zero, greatly lowering the startup costs for project parties. At the same time, popular tokens no longer need to "graduate" to Raydium but can directly build trading pairs in PumpSwap's internal liquidity pool, achieving a seamless connection from issuance to trading. This process also features "instant migration"—tokens can be traded as soon as they complete the binding curve, significantly improving efficiency compared to the previous wait time of several minutes or even hours.
More importantly, PumpSwap introduces a revenue-sharing mechanism (though it has not yet launched). According to the plan, a fee of 0.25% will be charged for each transaction, with 0.20% allocated to liquidity providers and 0.05% going to the protocol, with a portion of future revenue returned to token creators. This design not only incentivizes project parties to participate but also opens new revenue channels for Pump.fun. Additionally, PumpSwap supports various types of tokens, including meme coins and non-meme coins (such as PENGU, APT), and allows users to create liquidity pools for free, further lowering the participation threshold.
On the technical side, PumpSwap adopts a constant product automated market maker (Constant Product AMM) model, similar to Uniswap V2 and Raydium V4, combined with Solana's high throughput and low latency characteristics to ensure the stability and efficiency of transactions.
In terms of security, Pump.fun has learned from the lessons of the 2024 attack incident. PumpSwap has undergone nine audits by multiple institutions, including Pashov Group and OtterSec, and plans to collaborate with Cantina.xyz to host a security competition with a $2 million bounty to identify potential vulnerabilities. Its code will also be open-sourced to enhance community trust.
The Dual Impact of PumpSwap: Saving Pump.fun from Crisis, Shaking Up the Solana DEX Landscape
The launch of PumpSwap is significant for Pump.fun; it is both a tactical adjustment to address the current predicament and a strategic layout for long-term development.
For Pump.fun, PumpSwap primarily means the construction of an ecological closed loop. The full-chain service from token issuance to trading not only reduces dependence on external DEXs like Raydium but also enhances user experience and platform stickiness. The current daily protocol revenue of $889,000 indicates that Pump.fun urgently needs new growth points. The 0.25% transaction fee of PumpSwap and the future creator revenue-sharing mechanism are expected to compensate for the revenue decline through increased trading volume, potentially even pushing it back to the profit levels of its peak period.
More critically, PumpSwap may reverse the downward trend of Pump.fun. The current situation of a graduation rate below 1% and a drop of over 80% in the number of new tokens reflects users' pessimistic expectations for the platform's future. The zero migration fee and instant trading features of PumpSwap may stimulate more project parties to return, attracting liquidity providers and traders, thereby increasing the success rate of tokens and market activity. In competition with Four.Meme, PumpSwap's low cost and high efficiency also provide it with a differentiated advantage. If it can restore community confidence, Pump.fun is expected to move from "hovering in the trough" to "bouncing back from the bottom."
For the Solana ecosystem, the impact of PumpSwap is equally profound. It further solidifies Solana's position as a meme coin trading center. By lowering entry barriers and providing internal liquidity, PumpSwap is expected to attract more token projects and capital inflows, driving a rebound in on-chain trading volume. However, this also poses a challenge to the existing DEX landscape. The token RAY of Raydium fell 7.6% within five minutes of the PumpSwap announcement and nearly 9% on the day, indicating market concerns about competitive pressure. In the future, Raydium may need to respond by lowering fees or launching new features (such as LaunchLab), while other small to medium-sized DEXs may face the risk of being squeezed out of the market.
In the long run, the success of PumpSwap will depend on whether it can ignite new enthusiasm in the meme coin bear market. In the short term, its low barrier characteristics may stimulate trading activity, but if the overall heat of meme coins does not rebound, the effect may be limited. The market will provide the answer to all of this.
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