Pump.fun, a token launchpad, has announced the launch of PumpSwap, a decentralized exchange (DEX) built on the Solana blockchain. The new DEX will launch tokens after completing their bonding curve instead of creating a liquidity pool on Raydium, eliminating the previous migration fee. PumpSwap is an automated market maker (AMM) similar to Raydium and Uniswap, allowing users to create liquidity pools, contribute to existing pools, and trade all tokens listed on the platform. The platform also incorporates a fee structure where each trade incurs a 0.25% fee, with 0.20% allocated to liquidity providers and 0.05% to the protocol.
Additionally, Pump.fun has announced a Creator Revenue Sharing model, which will adjust the fee distribution and allocate a portion of protocol revenue to token creators. The platform has prioritized security measures, undergoing nine independent security audits and planning to open-source the PumpSwap program for further transparency. Despite a nearly 60% decrease in monthly revenue following the memecoin craze cool-off in February, Pump.fun remains the seventh largest protocol on Solana in terms of revenue. The decrease in revenue was attributed to market sentiment following the LIBRA memecoin fiasco and concerns about heavy insider trading activity in the memecoin sector.
The launch of PumpSwap on Solana aims to create a more frictionless environment for trading coins by eliminating the need for migrations and introducing a free migration system. The DEX will facilitate trading using a constant product formula and a fee structure similar to other decentralized exchanges. Pump.fun has expressed their commitment to aligning incentives between token creators and their communities through the Creator Revenue Sharing model, supporting the development of higher-quality projects. The platform’s focus on security measures and transparency is evident through the numerous independent security audits conducted and the planned open-sourcing of the PumpSwap program.
Despite a decrease in revenue following the memecoin craze cool-off in February, Pump.fun remains a significant player in the Solana ecosystem, ranking as the seventh largest protocol in terms of revenue. The platform’s introduction of PumpSwap, a decentralized exchange built on Solana, aims to streamline the trading process and eliminate friction points such as migration fees. The platform’s commitment to security, transparency, and supporting token creators through the Creator Revenue Sharing model demonstrates its dedication to providing a high-quality trading experience for users. With the ongoing development of PumpSwap and initiatives to enhance fee distribution and revenue sharing, Pump.fun is poised to continue its growth within the Solana ecosystem.
