Raydium's RAY token dropped 22% to $3.28 amid speculation that the meme coin launchpad Pump.fun is developing its own automated market maker (AMM), potentially threatening Raydium's market dominance. The decline was further compounded by concerns over a test version of the AMM that could divert trading volume away from Raydium. Analysts note that Raydium has traditionally benefited from tokens migrating to its AMM, which charges a 0.25% swap fee. If Pump.fun successfully rolls out its own AMM, it might attract trading activity and reduce Raydium's fee revenue since projects currently pay 6 SOL (approximately $950) to launch on Raydium. Despite Pump.fun processing over $5.3 million in fees at its peak, only 1.4% of tokens launched progress to Raydium's more liquid pools. The situation remains uncertain as Pump.fun has yet to respond to inquiries regarding the AMM.

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