- Pump.fun launched PumpSwap to simplify token trading and reduce user friction after revenue fell sharply.
- PumpSwap allows free token migrations and uses an AMM model to support Solana-based asset trading.
- The launch follows a drop in memecoin volume which caused a major decline in Pump.fun’s earnings.
Solana-based token launchpad Pump.fun has introduced PumpSwap, a native decentralized exchange (DEX), amid a sharp revenue drop. The platform recorded a 60% decrease in monthly revenue between mid-January and mid-February. The launch aims to improve token trading and address user friction from previous migration systems.
PumpSwap replaces the former migration process that required a 6 SOL fee and routed liquidity through Raydium. Now, tokens complete their bonding curve and move directly to PumpSwap. This change eliminates delays and removes additional costs for users. The update is expected to simplify trading and boost token momentum.
Automated Market Maker and Trading Features
PumpSwap uses a constant product Automated Market Maker (AMM), similar to Raydium V4 and Uniswap V2. It allows users to create and contribute to liquidity pools at no cost. The platform supports trading for tokens like USDe, PENGU, SEI, Jupiter (JUP), and Wormhole (W).
Each trade carries a 0.25% fee. Of that, 0.20% goes to liquidity providers, while 0.05% supports the protocol. Pump.fun also plans to introduce a Creator Revenue Sharing model. This will allocate part of protocol revenue to token creators. The goal is to strengthen ties between creators and their communities.
Security and Transparency Prioritized
Pump.fun emphasized its focus on safety while developing PumpSwap. The DEX has passed nine audits by independent security firms. The team also plans to open-source the PumpSwap code in the future. This step aims to enhance transparency and community trust.
Pump.fun’s revenue slump aligns with a broader decline in the memecoin market. February saw a steep drop in trading volume, following the LIBRA token collapse. LIBRA lost 95% of its value within two days after reaching a $4.5 billion market cap.
This market downturn reduced memecoin trading volume from $206 billion in January to $99.5 billion in February. Pump.fun’s revenue reflected the trend, falling from 588,478 SOL to less than half the following month. Despite this, Pump.fun remains a top revenue-generating protocol on Solana.
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