Can Solana DEXs Compete With Hyperliquid? The Bifurcation of Decentralized Exchange Volume

The perpetual futures market has emerged as one of the most hotly contested battlegrounds in cryptocurrency trading, with Hyperliquid's meteoric rise challenging both centralized exchanges and decentralized alternatives. In a recent episode of the Lightspeed podcast, host Jack sat down with Carlos Gonzalez Campo to explore whether Solana-based decentralized exchanges can compete with Hyperliquid's dominance in the perps space, and why the answer is far more nuanced than a simple comparison of trading volumes.

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The conversation revealed a fundamental truth about decentralized exchange architecture: different products serve different purposes, and the future of on-chain trading isn't about one model winning over another. Instead, we're witnessing a sophisticated bifurcation of trading volume based on asset type, trader profile, and execution requirements. This deep dive into the structural differences between Solana's AMM-powered meme coin infrastructure and Hyperliquid's order book-based perpetual futures platform illuminates why direct competition may not be the right frame for understanding this evolving landscape.

The Nature of Perpetual Futures Trading

Perpetual futures, commonly known as perps, have become one of the most popular financial instruments in cryptocurrency markets. At their core, perps allow traders to speculate on the price movement of assets without actually owning the underlying cryptocurrency. Unlike traditional futures contracts that have expiration dates, perpetual contracts can be held indefinitely, making them particularly attractive for both short-term speculation and longer-term directional bets.

The conversation opened with a candid assessment of what perps actually represent in the crypto ecosystem. As Jack noted, perps are "basically just gambling" for many users, though serious traders do utilize them for sophisticated strategies including hedging and portfolio management. The reference to traders like James Nguyen, who famously built positions exceeding $1.2 billion, illustrates the casino-like potential that attracts retail traders to these instruments.

This casino aspect is precisely what makes Hyperliquid so compelling to many users. The platform has successfully combined the leverage and speculation opportunities of perpetual futures with the permissionless nature of decentralized finance. Traders can open positions without going through the extensive know-your-customer (KYC) verification processes required by centralized exchanges like Binance, creating a unique value proposition that has driven substantial volume to the platform.

The appeal of no-KYC trading cannot be understated in understanding Hyperliquid's growth. Many traders actively avoid platforms requiring identity verification, whether for privacy reasons, regulatory concerns, or simply the friction that KYC processes introduce to the trading experience. As Carlos acknowledged, "some people argue that the only reason traders are using Hyperliquid is just the reason you mentioned because they offer no KYC."

However, Carlos pushed back against this oversimplification, arguing that attributing Hyperliquid's success solely to its no-KYC policy is "undermining what they have pulled off." The platform has built what he describes as "a great product," suggesting that execution quality, user experience, and platform reliability have all contributed to its market position.

Why Pump.fun Shouldn't Build Perps

One of the most provocative questions raised during the discussion centered on whether Pump.fun, reportedly preparing to raise a billion dollars via an initial coin offering, should expand into perpetual futures trading. The logic seems straightforward on the surface: if Hyperliquid is one of the most successful products in crypto alongside Pump.fun, why not combine the two?

Carlos offered a compelling counterargument grounded in the fundamental differences between these business models. "I look at Pump more like as a consumer product almost where you have like this very high turnover of mint coins," he explained. The key insight is that Pump.fun's entire value proposition revolves around newly created assets, not established markets.

The data supporting this distinction is striking. According to Carlos's analysis, "almost 70% of Raydium's volume comes from pools that were created in the past like 30 days." This means the majority of trading activity on meme coin platforms involves assets that didn't exist a month ago. The entire user experience is built around "chasing being early to the next meme coin," which creates a fundamentally different dynamic than perpetual futures trading.

For perpetual contracts to function efficiently, you need deep liquidity, professional market makers, and stable price feeds. These conditions exist for major cryptocurrencies like Bitcoin, Ethereum, and increasingly for tokens like HYPE (Hyperliquid's native token). Carlos noted that "the majority of the volume from Hyperliquid comes from L1s like Bitcoin, Ethereum, HYPE."

Creating perpetual markets for newly launched meme coins faces insurmountable practical challenges. "You wouldn't have market makers coding at a meme coin that is one day old," Carlos observed. Market makers require stable conditions, predictable price behavior, and sufficient trading history to provide competitive quotes. A token that launched hours ago and could go to zero just as easily as it could multiply by a hundred offers none of these conditions.

The exception that proves the rule came with high-profile launches like the Trump meme coin, where sufficient attention and liquidity justified derivative products. But for the thousands of meme coins launched daily on Pump.fun, perpetual markets simply don't make sense from either a technical or economic standpoint.

The Structural Advantages of AMMs for Long-Tail Assets

A crucial technical distinction emerged in the conversation around automated market makers (AMMs) versus order book models for different asset classes. Carlos emphasized that "AMMs are a lot more efficient in handling the liquidity for these assets" when discussing meme coins and other long-tail tokens.

The efficiency argument stems from how these different systems handle the cold start problem. When a new token launches, there are no existing market makers, no order book depth, and no established price discovery mechanism. AMMs solve this elegantly through their mathematical formulas that automatically determine prices based on the ratio of assets in liquidity pools.

This automatic price discovery is essential for new tokens because it removes the need for sophisticated market participants to bootstrap liquidity. Anyone can provide liquidity to an AMM pool, earning fees in the process, which creates a self-sustaining system for even the most obscure tokens. Order book systems, by contrast, require active participation from traders willing to post limit orders, which simply doesn't happen for most newly created assets.

The permissionless nature of AMMs also aligns perfectly with the meme coin ethos. Token creators can establish trading pairs immediately upon launch without negotiating with market makers or waiting for exchange listings. This instant liquidity is part of what makes platforms like Pump.fun and Raydium so effective at capturing the speculative energy around new token launches.

Raydium's Declining Market Share and the Pump.fun Challenge

The discussion took a detailed look at Raydium's competitive position following Pump.fun's decision to launch its own AMM, Pump Swap. Carlos's data painted a concerning picture for the established DEX: "Raydium's market share has decreased from almost 60% at the beginning of the year to 35% as of today."

This decline directly correlates with Pump.fun's strategic pivot away from Raydium. When Pump.fun graduated tokens to Raydium in 2024, the arrangement was mutually beneficial. Pump.fun captured the initial speculation on new tokens while Raydium earned trading fees as those tokens found their secondary market. At times, Raydium generated more revenue than Pump.fun itself through this partnership.

The dynamic shifted dramatically when Pump.fun announced in February that they would "phase out Raydium graduations for their own AMM Pump Swap." Given that 80% of Raydium's volume comes from meme coins, and roughly two-thirds of that volume involves pools less than 30 days old, losing the primary source of new meme coin listings represented an existential threat to their business model.

Raydium's response came in the form of Launch Lab, their own token launch platform designed to compete directly with Pump.fun for meme coin creators. The platform has secured some notable partnerships, including a collaboration with Bonk that uses Launch Lab as the backend for their launchpad product. However, Carlos assessed that "I don't think it has been as successful as Pump" in capturing market share.

The Philosophy of Owning the User Flow

A critical insight from the conversation centered on what truly matters in the DeFi landscape: owning the user flow. Carlos referenced a tweet from Mark at the Blockworks research team that encapsulated this philosophy: "Own the user, own the flow."

This principle explains the strategic moves being made across the Solana DeFi ecosystem. The most valuable position isn't necessarily having the best smart contracts or the deepest liquidity pools. Instead, it's controlling the entry point where users interact with the ecosystem. Whoever owns the front-end experience and captures user attention can direct that flow to their own backend infrastructure.

Pump.fun understood this principle intuitively. By building an engaging, consumer-focused product that attracted massive user attention, they created the option to vertically integrate their AMM and capture the full value chain. Raydium, despite being technically sound and an "OG DeFi protocol in the Solana ecosystem," found themselves vulnerable when their primary source of user flow decided to compete directly.

The implications extend beyond just Raydium and Pump.fun. Any protocol that relies on partnerships for user acquisition faces similar risks. The sustainable position is either controlling the user-facing experience directly or becoming so essential to the backend infrastructure that integration partners can't easily replace you.

Centralized Exchanges as the True Hyperliquid Competitors

When asked about who could realistically compete with Hyperliquid in the perpetual futures space, Carlos pointed not to Solana DEXs but to centralized exchanges. "When I think about Hyperliquid's main competitors, centralized exchanges are on the top of the list," he stated definitively.

This framing makes sense given the market structure. Hyperliquid's volume comes primarily from major cryptocurrencies like Bitcoin and Ethereum, exactly the assets where centralized exchanges like Binance have historically dominated. The shift of volume from CEXs to Hyperliquid represents a migration of sophisticated traders seeking the benefits of decentralization without sacrificing execution quality.

Binance, notably, already offers a perpetual futures product and has significant market share to defend. The fact that Hyperliquid has managed to capture meaningful volume despite Binance's scale, liquidity, and brand recognition speaks to the genuine product advantages Carlos mentioned. Yet Binance's KYC requirements remain a competitive disadvantage against Hyperliquid's permissionless access.

The conversation noted that this KYC dynamic creates a meaningful market segmentation. Some traders prioritize regulatory compliance and the institutional backing that comes with verified exchanges. Others value privacy and frictionless onboarding above all else. Hyperliquid serves the latter segment exceptionally well, while centralized exchanges cater to traders who either must or choose to operate within KYC frameworks.

The Bifurcation of DEX Volume by Asset Type

Perhaps the most analytically valuable insight from the conversation was Carlos's framework for understanding how DEX volume is splitting based on asset characteristics. Rather than viewing the DEX landscape as a single competitive arena, he described an emerging bifurcation where different models dominate different market segments.

"On the one hand, I think AMMs like Raydium and Pump Swap will continue to dominate long-tail asset volumes such as new meme coins," Carlos explained. This domain plays to AMMs' structural advantages: permissionless listing, automatic price discovery, and no dependence on professional market makers.

"On the other hand, for highly liquid markets like the SOL-USD pair or stable-to-stable trades, what you're seeing is an increased flow of volume go to prop AMMs like SolFi." These oracle-based AMMs function differently from traditional AMMs, with protocol-owned liquidity rather than external liquidity providers.

The key distinction is in how these different models handle price execution. For major trading pairs with deep liquidity needs, oracle-based systems can quote more competitive prices because they don't suffer from the impermanent loss and slippage issues that affect traditional AMMs. For long-tail assets where liquidity efficiency matters less than liquidity availability, traditional AMMs remain superior.

SolFi and the Rise of Oracle-Based AMMs

Carlos introduced SolFi as an example of the new category of oracle-based AMMs that are capturing increasing share of high-volume trading pairs. These protocols represent an evolution in AMM design that addresses some of the limitations traditional models face when competing with order books for major asset pairs.

The defining characteristic of protocols like SolFi is protocol-owned liquidity. Rather than relying on external liquidity providers who deposit assets into pools and bear impermanent loss risk, these systems use internal capital to quote prices. This enables tighter spreads and better execution because the protocol can actively manage its inventory rather than passively accepting whatever ratio exists in a liquidity pool.

The oracle component allows these systems to quote prices that closely track external markets, reducing arbitrage opportunities that typically benefit traders at liquidity providers' expense. By combining real-time price feeds with protocol-controlled liquidity, these AMMs can compete more effectively with centralized exchanges and order book DEXs for professional trading flow.

A striking statistic illustrates SolFi's position in the ecosystem: "About 80% of their volumes comes from aggregators." Aggregators like Jupiter route trades through whatever venue offers the best execution, so high aggregator flow indicates that SolFi consistently wins on price for certain trading pairs. This stands in stark contrast to Raydium and Pump Swap, where aggregator flow represents only about 20% of volume.

The Signal in Aggregator Flow Patterns

The aggregator flow percentages reveal important information about how different protocols serve the market. When aggregators consistently route through a particular venue, it signals that venue offers superior execution for that type of trade. When most volume comes from direct access rather than aggregators, it suggests users have reasons beyond pure execution quality to interact with that platform.

For SolFi, the 80% aggregator flow indicates their value proposition is almost entirely about execution quality. Traders aren't coming to SolFi for its brand or user experience; they're being routed there by algorithms seeking the best prices for SOL-USD and stable coin trades.

For Raydium and Pump Swap, the 20% aggregator flow tells a different story. The majority of their volume comes from "people hitting their program directly or people interacting through a Telegram trading bot or a trading platform like Axiom." These users aren't optimizing purely for execution; they're participating in the meme coin ecosystem where speed of access to new tokens matters more than marginal differences in execution prices.

This distinction reinforces the bifurcation thesis. Different protocols have evolved to serve different needs, and attempting to compete across all dimensions simultaneously would likely dilute their effectiveness in their core markets.

The Importance of New Asset Creation in Meme Coin Markets

Understanding the meme coin economy requires grasping just how dependent it is on constant new asset creation. Carlos's statistic that "about two thirds of [Raydium's] volume comes from pools that are less than 30 days old" reveals an ecosystem built entirely around novelty and the quest to be early.

This creates a peculiar economic dynamic where the most valuable capability is not optimizing existing markets but enabling new ones. The protocol that can most efficiently launch new tokens, attract initial speculation, and provide immediate liquidity captures the lion's share of value.

Traditional financial market infrastructure assumes relatively stable assets trading over long time horizons. Market microstructure research focuses on improving execution for established securities. The meme coin ecosystem inverts these assumptions entirely. Assets may exist for days or hours before being abandoned, making traditional market-making approaches economically unviable.

This explains why Pump.fun's success has been so difficult for competitors to replicate. Their product design specifically optimizes for the discovery and early trading of new tokens. Everything from the user interface to the bonding curve mechanism is tuned for this use case. Attempting to retrofit existing DEX infrastructure to compete in this space faces fundamental design constraints.

The Strategic Implications for Solana DeFi

The bifurcation Carlos described carries important strategic implications for the broader Solana DeFi ecosystem. Rather than viewing Hyperliquid as a competitor that Solana projects need to defeat, the more productive frame is understanding what types of trading activity Solana infrastructure serves best.

For long-tail assets and new token launches, Solana's combination of low fees, high throughput, and established AMM infrastructure creates genuine competitive advantages. No other ecosystem has developed the meme coin trading infrastructure that exists on Solana, and this specialization represents real value capture potential.

For perpetual futures on major assets, the competitive dynamics are different. Here, Solana-native projects like Drift compete more directly with Hyperliquid, but the battle is for a different type of trader with different priorities. The lack of native KYC requirements on most crypto infrastructure makes this a challenging differentiation point.

The healthiest strategic orientation for Solana projects may be doubling down on their distinctive strengths rather than attempting to replicate Hyperliquid's success. Pump.fun's billion-dollar fundraise, if it materializes, could fund expansion in many directions. But Carlos's analysis suggests that perpetuals may not be the most productive use of that capital.

Revenue Sustainability in the DEX Landscape

Carlos noted that despite Raydium's declining market share, "the revenues are very strong still." This observation highlights an important nuance about competitive dynamics in DeFi. Market share percentages don't directly translate to business viability, particularly when underlying markets are growing.

The overall volume in Solana DeFi has expanded dramatically, meaning that a smaller percentage of a larger pie can still represent growing absolute revenue. For Raydium, even at 35% market share, the absolute trading volume and resulting fees may exceed what they earned at 60% share of a smaller market.

This provides strategic breathing room for established protocols facing new competition. Rather than needing to match every competitive move, they can focus on sustainable differentiation while the overall market continues growing. The key is ensuring that their particular niche remains relevant and valuable.

For meme coin focused protocols, the relevance risk comes from shifts in user attention and speculation patterns. Should meme coin mania subside, protocols built entirely around this use case would face significant headwinds. Diversification into adjacent areas provides some insurance, but may also dilute focus on core competencies.

The Evolution of Trading Interfaces

The conversation touched on an interesting evolution in how users access Solana DEX liquidity. Beyond traditional web interfaces, Telegram trading bots and platforms like Axiom have become significant sources of trading volume. This fragmentation of access points creates both opportunities and challenges for DEX protocols.

On one hand, multiple interfaces mean more potential users discovering and interacting with protocol liquidity. Telegram bots lower barriers to entry for users who find web interfaces intimidating or inconvenient. Specialized platforms like Axiom serve power users with advanced features.

On the other hand, interface proliferation means DEX protocols lose direct relationships with end users. When someone trades through a Telegram bot, their loyalty and attention goes to that bot's brand, not the underlying DEX. This echoes the "own the user, own the flow" principle and explains why protocols increasingly seek to control their own front-end experiences.

The aggregator model represents yet another access pattern, where trades route through infrastructure like Jupiter before reaching execution venues. Here, the DEX protocol is purely a backend service provider, competing solely on execution quality. This works well for protocols like SolFi that excel at execution, but leaves them vulnerable to any efficiency improvements by competitors.

The Role of Professional Market Makers

Throughout the discussion, the presence or absence of professional market makers emerged as a crucial differentiator between trading venues and asset types. For major cryptocurrencies traded on perpetual platforms like Hyperliquid, professional market makers provide essential liquidity and tight spreads.

These market makers use sophisticated algorithms to quote competitive prices while managing inventory risk. Their participation depends on predictable market conditions, sufficient volume to justify operational costs, and reasonable assurance that quoted prices won't be adversely selected against by better-informed traders.

Meme coin markets fail nearly all these criteria. New tokens have no trading history, unpredictable volatility, and extreme adverse selection risk from insiders or early holders. No rational market maker would provide two-sided liquidity for a token launched hours ago that could go to zero or up 1000% based on a single tweet.

This explains the structural reliance on AMMs for long-tail assets. AMMs essentially crowdsource market making to anyone willing to provide liquidity, compensating them with trading fees but exposing them to impermanent loss. This model accepts worse execution quality as a tradeoff for guaranteeing liquidity availability across any asset that can be tokenized.

Hyperliquid's Product Excellence

While much of the conversation focused on Solana-native protocols, Carlos repeatedly emphasized that Hyperliquid deserves credit for genuine product excellence. Dismissing their success as purely a function of no-KYC access "undermines what they have pulled off."

This recognition matters for the Solana ecosystem because it sets realistic expectations for competition. Hyperliquid didn't succeed by accident or through a single gimmick. They built execution infrastructure that matches or exceeds centralized exchange quality while maintaining decentralization benefits. Competing with them requires similar excellence, not just different marketing.

The implication for Solana projects is that product quality remains paramount. No amount of ecosystem loyalty or token incentives can substitute for building something genuinely better. The good news is that Solana's technical architecture enables product excellence across many use cases. The challenge is executing at the level Hyperliquid has demonstrated.

The Consumer Product Paradigm

Carlos's characterization of Pump.fun as "almost like a consumer product" deserves deeper consideration. Traditional DeFi protocols have often optimized for technical sophistication, composability, and capital efficiency. Pump.fun instead optimized for entertainment value and user experience.

This consumer-first orientation explains their success in capturing retail attention during the meme coin boom. The platform feels more like a game than a financial application, lowering psychological barriers to participation. Token launches become events to participate in rather than just trades to execute.

The consumer product paradigm suggests that future DeFi success may come from similar experience design rather than purely technical innovation. Users who don't understand or care about smart contract architecture still want to participate in speculative opportunities. Meeting them where they are, with interfaces that feel familiar and engaging, creates genuine competitive advantages.

This doesn't mean technical excellence becomes irrelevant. Pump.fun's consumer experience runs on sophisticated infrastructure that enables the seamless token creation and trading they're known for. But the technical sophistication serves the consumer experience rather than being the primary value proposition.

Ecosystem Partnerships and Backend Integration

Raydium's partnership with Bonk, using Launch Lab as backend infrastructure for Bonk's launchpad product, illustrates one response to losing direct user relationships. By becoming infrastructure that other projects build upon, protocols can maintain relevance even without owning the front-end experience.

This backend integration model has tradeoffs. On the positive side, it creates multiple distribution channels and reduces dependence on a single user acquisition strategy. Different partner projects reach different audiences, potentially expanding the protocol's effective reach.

On the negative side, the protocol becomes dependent on partners' success and continued collaboration. Partners may later decide to build their own infrastructure, as Pump.fun did with Raydium. The backend position also typically captures less value than the front-end position, as the user-facing layer can extract rent from any backend provider.

For Raydium specifically, the ecosystem partnership strategy provides some buffer against Pump Swap competition while they develop Launch Lab's direct-to-consumer capabilities. Whether these partnerships prove durable or serve mainly as a bridge to rebuilding direct user relationships remains to be seen.

The OG Protocol Advantage

Carlos described Raydium as "an OG DeFi protocol in the Solana ecosystem," a status that carries both advantages and constraints. The advantages include brand recognition, battle-tested smart contracts, deep integrations throughout the ecosystem, and accumulated user trust built over years of operation.

These OG advantages provide a foundation for survival during competitive challenges. Users who've interacted with Raydium for years have some loyalty and familiarity that new entrants can't immediately replicate. Integration partners have sunk costs in working with Raydium's infrastructure that create switching costs.

The constraints include technical debt, organizational scale, and potentially slower innovation cycles. Newer protocols can design for current market conditions without legacy considerations. They can move faster and take more risks because they have less to lose.

For Raydium, navigating this transition requires balancing their established strengths against the need for rapid adaptation. Their continued strong revenues provide resources to fund this adaptation, but success isn't guaranteed against nimbler competitors.

What This Means for Solana's Competitive Position

Stepping back from individual protocol dynamics, the conversation illuminates Solana's overall competitive position in DeFi. The ecosystem has developed genuinely differentiated capabilities in high-throughput trading, particularly for volatile long-tail assets.

This specialization isn't accidental. Solana's technical architecture, with sub-second finality and minimal transaction costs, enables use cases that would be impractical on networks with higher latency and fees. The meme coin trading infrastructure that has developed represents real innovation in making speculative markets accessible.

At the same time, the conversation suggests that Solana shouldn't expect to dominate every DeFi category. Hyperliquid has found a compelling niche in perpetual futures that may prove durable. Rather than viewing this as a failure, Solana projects can focus on the categories where their infrastructure provides genuine advantages.

The healthy interpretation is that crypto DeFi is large enough for multiple specialized ecosystems. Solana excels at certain things, other chains and protocols excel at others. User and capital flow between these systems as needs dictate. Competition occurs at the margin, but distinctive capabilities create sustainable positions.

Looking Forward: The Evolution of On-Chain Trading

The dynamics described in this conversation will continue evolving as the market matures. Several trends seem likely to shape the next phase of development.

First, the bifurcation between AMM-served and order book-served markets will likely deepen. As each model optimizes further for its core use cases, the distinctions will become more pronounced. Hybrid approaches may emerge, but pure specialization seems to produce the best results currently.

Second, the front-end wars will intensify. Protocols that can own user relationships will capture disproportionate value, leading to continued innovation in user experience and distribution. Expect to see more consumer-focused products attempting to replicate Pump.fun's success.

Third, professional market maker participation will likely expand to additional Solana markets as infrastructure improves. This could shift more volume toward order book-style systems for assets that achieve sufficient scale, while AMMs remain essential for true long-tail assets.

Fourth, the regulatory environment will influence competitive dynamics, particularly around KYC requirements. Should regulations tighten, no-KYC platforms like Hyperliquid could face challenges, potentially redirecting volume to compliant alternatives.

Conclusion: Different Products for Different Purposes

The fundamental answer to whether Solana DEXs can compete with Hyperliquid is that they're often not directly competing. The meme coin trading infrastructure on Solana serves a different purpose than Hyperliquid's perpetual futures platform. Different trader profiles, different asset types, and different user experiences create largely separate markets.

Where competition does exist, in the perpetual futures space specifically, Solana-native protocols like Drift face a formidable competitor in Hyperliquid. Success requires matching Hyperliquid's execution quality while finding sustainable differentiation. This is achievable but challenging.

The more interesting opportunity for Solana may be continuing to develop distinctive capabilities rather than pursuing head-to-head competition everywhere. The meme coin infrastructure, while sometimes dismissed as trivial, represents genuine innovation in making speculative markets accessible. The high-throughput trading environment enables use cases impossible on other chains.

Carlos's analysis provides a framework for thinking about these dynamics without falling into zero-sum thinking. Multiple successful products can coexist, serving different needs within a growing market. The key strategic question for any protocol is whether their distinctive capabilities will remain relevant and valuable as the market evolves.

For Solana specifically, the ecosystem appears well-positioned for continued growth in its areas of strength. The technical foundation enables compelling products, and the developer community continues building. Whether any single Solana protocol defeats Hyperliquid matters less than whether the overall ecosystem thrives by serving genuine user needs.

Facts + Figures

• Raydium's market share has declined from approximately 60% at the beginning of 2025 to 35% as of the recording date, representing a significant competitive shift in the Solana DEX landscape.

• Nearly 70% of Raydium's trading volume comes from liquidity pools that were created within the past 30 days, highlighting the platform's dependence on newly launched tokens.

• Approximately 80% of Raydium's volume comes from meme coins, making them exceptionally vulnerable to competition in the token launch space.

• About two-thirds of Raydium's volume comes from pools less than 30 days old, demonstrating the meme coin ecosystem's reliance on constant new asset creation.

• SolFi receives approximately 80% of its volume from aggregators, indicating superior price execution for major trading pairs like SOL-USD and stable-to-stable swaps.

• Raydium and Pump Swap receive only about 20% of their volume from aggregators, with the majority coming from direct access and Telegram trading bots.

• Pump.fun is reportedly preparing to raise approximately $1 billion via an initial coin offering (ICO), which would be one of the largest crypto fundraises in recent history.

• Hyperliquid's majority trading volume comes from Layer 1 tokens including Bitcoin, Ethereum, and HYPE, representing a fundamentally different market than meme coin platforms.

• Pump.fun announced in February 2025 that they would phase out Raydium graduations in favor of their own AMM, Pump Swap.

• Raydium has partnered with Bonk to use Launch Lab as backend infrastructure for Bonk's launchpad product.

• Binance maintains a perpetual futures product but has lost some volume to Hyperliquid despite their established market position and extensive KYC compliance.

• Oracle-based AMMs like SolFi use protocol-owned liquidity rather than external liquidity providers, enabling tighter spreads for major trading pairs.

Questions Answered

Should Pump.fun build perpetual futures to compete with Hyperliquid?

No, Pump.fun should not build perpetual futures because the business models are fundamentally different. Pump.fun operates as a consumer product focused on high turnover of newly created meme coins, where approximately 70% of related volume comes from tokens created in the past 30 days. Perpetual futures require professional market makers, deep liquidity, and stable price feeds that exist for major cryptocurrencies but are impossible to provide for day-old meme coins. The trader profiles are entirely different, with perp traders focusing on established L1 tokens while meme coin traders chase being early to new token launches.

Why has Raydium's market share declined so significantly in 2025?

Raydium's market share dropped from 60% to 35% primarily because Pump.fun launched its own AMM (Pump Swap) and stopped graduating tokens to Raydium. Since 80% of Raydium's volume came from meme coins, and about two-thirds of that volume involved pools less than 30 days old, losing Pump.fun's token graduations devastated their primary source of new trading volume. Raydium launched Launch Lab to compete for token launches, but it hasn't achieved the same success as Pump.fun's platform.

Who are Hyperliquid's main competitors?

Centralized exchanges like Binance are Hyperliquid's primary competitors, not Solana DEXs. Hyperliquid's volume comes mainly from major cryptocurrencies like Bitcoin and Ethereum, the same markets where CEXs have traditionally dominated. Hyperliquid has successfully captured volume from these exchanges by offering a high-quality trading experience without KYC requirements. While some argue that no-KYC is Hyperliquid's only advantage, their product quality and execution have also contributed significantly to their market position.

Why are AMMs better suited for meme coins than order books?

AMMs are more efficient for meme coins because they solve the cold start problem that new tokens face. When a token launches, there are no existing market makers, no order book depth, and no established price discovery mechanism. AMMs automatically determine prices through mathematical formulas based on asset ratios in liquidity pools, enabling instant trading without requiring sophisticated market participants. Professional market makers won't provide liquidity for day-old meme coins due to extreme volatility, adverse selection risk, and unpredictable price behavior.

What does high aggregator flow percentage indicate about a DEX protocol?

High aggregator flow indicates superior price execution quality for specific trading pairs. Aggregators like Jupiter route trades through whatever venue offers the best execution, so when 80% of a protocol's volume comes from aggregators (as with SolFi), it means they consistently win on price. Conversely, low aggregator flow (around 20% for Raydium and Pump Swap) suggests users have reasons beyond pure execution quality to use those platforms, such as access to new token launches or integration with Telegram trading bots.

How are oracle-based AMMs different from traditional AMMs?

Oracle-based AMMs like SolFi use protocol-owned liquidity rather than external liquidity providers depositing assets into pools. This enables tighter spreads and better execution because the protocol can actively manage its inventory rather than passively accepting whatever ratio exists in a liquidity pool. The oracle component allows these systems to quote prices closely tracking external markets, reducing arbitrage opportunities that typically benefit traders at liquidity providers' expense.

What is the strategic principle behind Pump.fun's success?

The key strategic principle is "own the user, own the flow" - controlling the entry point where users interact with the ecosystem captures disproportionate value. Pump.fun built an engaging consumer product that attracted massive user attention, then vertically integrated their own AMM to capture the full value chain. By owning the front-end experience and user relationships, they could redirect flow to their own backend infrastructure instead of depending on partners like Raydium who could be replaced.

Can Raydium survive as a Solana DEX protocol?

Yes, Raydium can survive despite declining market share because their revenues remain strong and they retain advantages as an established "OG DeFi protocol" in the Solana ecosystem. The overall Solana DEX market has grown, meaning 35% of a larger pie can still represent healthy absolute revenue. They're pursuing ecosystem partnerships like their Bonk collaboration and developing Launch Lab to rebuild direct user acquisition capabilities, though their long-term position depends on successfully adapting to the new