By KarenZ, Foresight News
In 2024, Pump.fun rose rapidly with its innovative token creation model and became an important driving force in the Solana ecosystem Meme token craze. However, with the ebb and flow of the Solana ecosystem Meme market, Pump.fun faces multiple challenges: the solid position of mature DEXs such as Raydium and Jupiter in the trading field, the gradual decline of users' enthusiasm for Meme tokens, and the competitive pressure of the BSC network have hindered Pump.fun's growth momentum, prompting the Pump.fun team to re-examine its development strategy.
Just this morning (March 21, 2025), Pump.fun officially announced the launch of its DEX - PumpSwap, marking the platform's transformation from a single token launch platform to a comprehensive platform that integrates token launch and trading. Can the launch of PumpSwap inject new vitality into Pump.fun? Recreate its glory in the field of Meme tokens?
What does PumpSwap do?
PumpSwap adopts a constant product AMM model similar to Raydium V4 and Uniswap V2. The biggest change in PumpSwap is that it eliminates the intermediate step of migrating tokens from Pump.fun to an external DEX (Raydium). All "graduated" tokens that have completed the joint curve will directly create liquidity pools on PumpSwap and start trading.
The core features of PumpSwap include:
1. Seamless token migration : From now on, all tokens that have completed their joint curves will be directly migrated to PumpSwap instead of Raydium, which they previously relied on, and there is no need to pay a migration fee (previously 6 SOL). This change eliminates the economic barriers for token creators to enter the trading market.
2. Free liquidity pool creation and provision : Users can create liquidity pools at no cost and provide liquidity to existing pools.
3. Extensive token support : PumpSwap not only supports all Meme tokens graduated from Pump.fun, but also adds trading support for multiple popular project tokens, including PENGU, APT, TRON, cbBTC, USDe (Ethena), FXS, fxUSD, SEI, JUP, ZRO, MNDE, MPLX, DRIFT, PLUME, RETARDIO, SAVE, SCR, OX, W, etc. Among these tokens, APT (Aptos) and TRON are connected to the Solana ecosystem for the first time through PumpSwap, demonstrating the platform's ambition to expand compatibility.
4. Fees : PumpSwap charges a 0.25% handling fee for each transaction, of which 0.20% is allocated to liquidity providers and 0.05% belongs to the protocol.
5. Creator Sharing : The "Creator Sharing System" is also a highlight of PumpSwap. PumpSwap shares part of the protocol revenue with token creators, aiming to incentivize higher-quality Meme projects. The details of fee distribution will be further adjusted after the launch of this feature.
In terms of security, PumpSwap has passed 9 security audits conducted by Pashovgroup, OtterSec, bl0ckpain and Sec3, and promised to open source the code in the future to enhance community trust. pump.fun is currently conducting a PumpSwap audit competition with Cantina, a market application for Web3 security solutions, with a total reward of 2.01 million USDC.
What are the advantages and challenges of Pump.fun?
Pump.fun believes that the migration of tokens after graduation from Pump.fun is a major friction point that will slow the token's momentum and create unnecessary complexity for new users.
The launch of PumpSwap attempts to solve long-standing pain points and seize new market opportunities. First, the policy of free migration and creation of liquidity pools has greatly lowered the threshold for user participation, especially for small-scale investors and token creators, which enhances the attractiveness of the platform.
In the past, tokens had to be manually migrated to Raydium after graduating from Pump.fun, a process that was not only time-consuming, but also likely to miss the short-lived window of Meme token fever. PumpSwap natively integrates trading functions, allowing users to instantly enter the market and capture opportunities at the first opportunity.
The upcoming creator-sharing mechanism is expected to encourage more developers to invest their time and creativity to create more attractive Meme projects, thereby improving the overall quality and activity of the ecosystem by sharing protocol revenue with token creators.
However, the success of PumpSwap is highly dependent on the continued prosperity of the Meme token market within the Solana ecosystem. The LIBRA token crash in February 2025 highlighted the fragility of the market. If the market continues to cool, PumpSwap's trading volume and revenue will face severe challenges.
In addition, there are already mature DEXs such as Raydium and Jupiter in the Solana ecosystem. As a new DEX player, PumpSwap needs to quickly prove its advantages in terms of functionality and user experience.
On the other hand, PumpSwap’s low threshold may further amplify risks such as “soft rugs”, which may lead to the further proliferation of low-quality tokens and damage the interests of ordinary investors. In a weak market, the risk of low-quality tokens flooding is higher, which may further undermine user confidence.
summary
The launch of PumpSwap is Pump.fun's proactive response to market changes, and it is also a key step for it to move from a single launch pad to a comprehensive Meme trading ecosystem. By eliminating transaction friction, improving efficiency and incentivizing creators, PumpSwap has demonstrated mature design ideas at the technical level. The PumpSwap platform directly extends the life cycle of tokens to the transaction stage, forming a complete closed loop of "launch-transaction-incentive".
At the same time, Raydium, as the most liquid and traded DEX in the Solana ecosystem, benefited to a certain extent from the migration of Pump.fun's Meme tokens. The launch of PumpSwap directly cut off this source of traffic, keeping Meme token transactions in-house, causing Raydium's market share to shrink. However, Raydium also plans to launch LaunchLab to compete with Pump.fun.
In addition, the Solana ecosystem has not seen similar phenomenal projects for a long time, which has led to a significant cooling of users' enthusiasm for Meme tokens within the ecosystem, casting a shadow on the prospects of PumpSwap. Although PumpSwap's creator incentives have potential, it remains to be seen whether this trend can be reversed quickly, especially when it is difficult to produce explosive products in the short term.
In the future, if PumpSwap can create one hit meme after another and break the deadlock in the sluggish market, it is expected to occupy a place in the Solana ecosystem. Otherwise, it may become another attempt after the craze subsides, and it will be difficult to reproduce the former glory of Pump.fun.
