The Second Largest DEX by Volume: Raydium

Onchain Lense 18

Raydium is a Decentralized Exchange (DEX) based on the Solana blockchain. It allows users to swap assets quickly and at low costs using the AMM (Automated Market Maker) model, which uses liquidity pools to determine prices and execute trades.???

The Solana ecosystem has seen a surge in onchain activity over the past several months, and Raydium has been one of the leading DApps (Decentralized Applications) that benefitted from it. This increased activity can be attributed to the rise of meme coins on the Solana network.??

Raydium became the second-largest DEX by volume in July, only behind Uniswap. PancakeSwap had long held this position but was overtaken by Raydium last month. Uniswap had a volume of $54 billion, and Raydium had a volume of $30 billion. Raydium narrowly flipped Uniswap in weekly fees for a brief period and processed over 10 times as many transactions as Ethereum’s largest DEX.?

During this period, Raydium also emerged as the leading fee generator for Solana. It has almost doubled the fees generated in June, from $33 million to $65 million in July 2024. This resulted from tens of thousands of tokens launching on Solana each week using PumpFun, many of which were memecoins.???

PumpFun was partially responsible for making Raydium the second-largest DEX by volume last month because the liquidity of all tokens that filled the PumpFun bonding curve was burned to Raydium, making Raydium the go-to DEX for those tokens.?

The number of memecoins created using PumpFun is expected to be over 1.5 million since its launch in March 2024. So, it has also become one of the top three applications, including Jito, to generate the highest fees on the Solana network.???

It would be interesting to see if Raydium can maintain its position as the second-largest DEX overall and the highest revenue-generating DApp on the Solana blockchain. Despite processing exponentially more transactions, Raydium’s volume remains much lower than Uniswap's. This difference in transaction volume indicates low-value spam transactions, which may not be sustainable for any protocol.? ?