Raydium's native token, RAY, has experienced a significant decline following rumors that Pump.fun, a prominent Solana-based meme coin launchpad, is in the process of testing its own Automated Market Maker (AMM).

Official statements are yet to be released by Pump.fun or Raydium, leaving the market to respond solely to speculation.

The recent testing of Pump.fun's AMM has triggered a sell-off of Raydium (RAY), with the token's value plummeting by 31% within the last 24 hours, trading at $2.9 at the time of this report - marking its lowest point since October 2024.

The downward trend was triggered by the discovery of a test version of an AMM at the URL "amm.pump.fun." This finding was quickly shared across social media platforms, gaining momentum notably on X (formerly Twitter) where user trenchdiver first noted the development.

The implications of Pump.fun potentially launching its own liquidity pools are profound, as Raydium has long thrived on its relationship with the launchpad. While Pump.fun facilitates the creation and launch of meme coins at a minimal cost, Raydium provides necessary liquidity infrastructure. The tokens are then incorporated into Raydium's trading pools, resulting in increased trading volume and generated swap fees, under its current 0.25% charge.

A shift in Pump.fun’s strategy could redirect trading volume and fees from Raydium to its proprietary liquidity pools, potentially challenging Raydium's standing in the decentralized exchange (DEX) sphere.

The integration of the CRACK meme coin as the first token into Pump.fun's experimental liquidity pool hints at a possible shift away from Raydium. This move could disrupt the longstanding partnership that has been fundamental to Raydium's growth.

As the battle for Solana's liquidity intensifies, Raydium may need to reassess its approach or risk losing a crucial revenue stream. The competition for dominance in the DEX ecosystem is escalating, with the market already responding to these developments.