- Pump.fun has launched a native decentralized exchange (DEX), PumpSwap, on Solana.
- PumpSwap will eliminate token migration, discarding the associated 6 SOL fee.
- Pump.fun plans to create a more sustainable ecosystem alongside the new DEX.
Digital token launchpad Pump.fun has launched its own native decentralized exchange (DEX), PumpSwap, on the Solana blockchain by the name of PumpSwap. The move comes after the platform saw its revenue drop by nearly 60% in the last month.
According to reports, Pump.fun’s new DEX will eliminate the existing migration process in the previous system and discard the associated 6 SOL fee. Tokens launched on Pump.fun will now be immediately available for trading upon completion of their bonding curve, without the need for establishing a separate liquidity pool on Raydium.
What Problem Does PumpSwap Solve for Pump.fun Users?
Pump.fun announced the innovation in its latest post on X, highlighting the deliverables of the new product.
According to the announcement, the DEX will enable instant migrations, zero fees, increased liquidity, and a revenue-sharing feature.
Related:Pump.fun in Freefall? Solana Token Platform Sees Graduations Plummet
It is crucial to note that the newly launched DEX shares a few similarities with the Raydium V4 and Uniswap V2 decentralized solutions through its Constant Product AMM.
The Pump.fun team highlighted that this new infrastructure will enable users to freely create and contribute to liquidity pools, as well as trade any token listed on the PumpSwap exchange.
Key Features and Technology Behind PumpSwap
The core rationale behind PumpSwap’s creation is to achieve a frictionless environment for trading coins.
Pump.fun acknowledged that the prior migration system introduced friction, potentially impeding the momentum of new tokens and adding unnecessary complexities for users. The new system aims to resolve these issues by providing instant and cost-free migrations.
Related: Pump.fun Token Graduation Rate Plunge: Is the Platform in Trouble?
In the meantime, Pump.fun noted that it is creating a more sustainable ecosystem besides the newly launched DEX. According to the project, the DEX will incorporate a revenue-sharing model for token creators, potentially distributing millions of dollars to these participants and their communities, thereby incentivizing the launch of higher-quality projects.
Regarding transaction costs, PumpSwap’s fee structure is competitive. Each trade executed on the DEX will incur a fee of 0.25%. Of this, 0.20% will be allocated to liquidity providers, and the remaining 0.05% will be retained by the protocol.
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