Pump.fun Launches PumpSwap: From 6 SOL to Zero for Token Migrations

Quick Take:

• Pump.fun launches PumpSwap, a new Solana-based DEX. The platform offers zero-fee token migrations, reducing costs from the previous 6 SOL charge.

• A revenue-sharing plan for token creators on Pumpswap is in development.

Pump.fun, a Solana-based memecoin launchpad, has officially launched its decentralized exchange (DEX) platform, PumpSwap. This move strategically positions Pump.fun as a direct competitor to Solana's leading DEXs, such as Raydium, by offering new functionality and reduced costs.

As Pump.fun stated, PumpSwap V1 is a decentralized exchange built on Solana, which functions similarly to Raydium V4 & Uniswap V2 through its Constant Product AMM. Users can create their own liquidity pool for free, add liquidity to existing pools and trade tokens seamlessly.

Streamlined Migration and Lower Costs

With the introduction of PumpSwap, Pump.fun has announced that all tokens completing their joint curve processes will now migrate directly to this new platform, bypassing the need to transition to Raydium, a Solana-based DEX and automated market maker (AMM). This change eliminates the reliance on external DEXs like Raydium, which previously hosted trading for Pump.fun’s tokens.

The migration process has been streamlined, offering instant transitions with zero fees-a reduction from the previous 6 SOL charge. This initiative is expected to significantly reduce friction for projects and enhance liquidity within the ecosystem.

As stated by Pump.fun on X, "From day one, our goal was to create the most frictionless environment for trading coins. Migrations were a major point of friction. They slow a coin's momentum and introduce needless complexity for new users."

Revenue Sharing Plan for Creators

PumpSwap also reveals that a creator revenue sharing plan is coming soon. For now, PumpSwap imposes a 0.25% transaction fee on every transaction, with 0.20% allocated to liquidity providers, and 0.05% is retained by the protocol. Once the revenue-sharing plan is fully implemented, a percentage of protocol revenue will be shared with coin creators to further incentivize their participation. According to Pump.fun, this approach aims to align creators with their communities, which contributes to "create a more sustainable ecosystem".

Strengthening Solana’s Core Trading Infrastructure

Pump.fun’s founders have expressed their ambition for PumpSwap to be a cornerstone of Solana’s permissionless token trading ecosystem. The platform has already secured partnerships with several token projects, like $PENGU, $APT, $cbBTC, to establish liquidity pools on PumpSwap.

Heated Competition on Solana

The launch of PumpSwap comes at a time when competition among Solana-based DEXs is heating up.

Before PumpSwap, Pump.fun has served as a "traffic provider" for Raydium for an extended period. It must pay a portion of transaction fees for each transaction flowing to external pools. Meanwhile, Raydium is launching a token launchpad called "LaunchLab," which is essentially a replacement of Pump.fun. Both projects are trying to expand their business offerings to grab each other's liquidity.