Key Insights
- October was Raydium’s first month as the number one DEX by volume across all chains. This trend accelerated in November with Raydium eclipsing Uniswap in monthly DEX volume by roughly 30% ($124.6 billion vs $90.5 billion).
- The platform’s success is largely attributed to its dominance within the Solana ecosystem. In November 2024, Raydium consistently captured over 60% of daily DEX volume on Solana.
- Memecoin trading has become a substantial driver of Raydium’s volume, with memecoins accounting for an all-time high of 65% of Raydium’s monthly volume in November.
- Raydium’s growth also reflects the broader trend of Solana’s daily DEX volume surpassing Ethereum’s. In November, Solana had a nearly 50% share of monthly DEX volume across all chains, 175% more than Ethereum’s roughly 18% share.
- The launch of Raydium’s V3 in March 2024 was a key catalyst in its rise to leading volume share on both Solana and globally in November.
Primer
Raydium (RAY) is the largest automated market maker (AMM) decentralized exchange (DEX) on Solana. First launched in 2021, Raydium allows users to permissionlessly create new liquidity pools, provide liquidity to existing pools, and swap tokens. Liquidity providers earn trading fees on each swap made in a pool as well as RAY (the protocol’s token) and/or other tokens if the pool is incentivized. RAY holders can also stake RAY to earn additional RAY tokens.
In 2024, the Solana DEX ecosystem has seen remarkable growth, with Raydium at its forefront. This growth is partly due to Solana’s technical advantages, including high throughput and low transaction costs, which have attracted users seeking a faster and more cost-effective DeFi experience. Since early October 2024, Solana has consistently had more daily DEX volume than Ethereum, marking a significant shift in the broader DeFi landscape.
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Raydium’s Ascent to DEX Dominance
Volume Growth Overview
Raydium’s journey to the top of the DEX rankings has been marked by consistent growth and strategic developments. October was Raydium’s first month as the number one DEX by volume across all chains. This trend accelerated in November with Raydium eclipsing Uniswap in monthly DEX volume by roughly 30% ($124.6 billion vs $90.5 billion). This shift reflects both the relative strength of Raydium to other DEXs on Solana and Solana’s increasing share of global DEX volume.
Solana Market Share Analysis
In 2024, Raydium’s share of Solana DEX volume has grown substantially. From March 6, 2024, onwards, Raydium has consistently had more daily volume than Orca, its main competitor on Solana. The third quarter of 2024 marked Raydium’s first quarter since 2022 with the majority of Solana’s daily DEX volume and its second straight as the leader in daily DEX volume. In November 2024, Raydium consistently captured over 60% of daily DEX volume on Solana, solidifying its position as the dominant DEX on the platform.
Catalysts for Raydium’s Success
Technical and User Interface Upgrades
A key factor in Raydium’s ascent has been its continuous innovation. In March 2024, Raydium released its V3 user interface in beta. This interface introduced a new portfolio page for users to view and manage liquidity positions, a liquidity page that consolidates all Raydium liquidity pools in one place, support for exact swap amounts, and charts for all tradable token pairs. In May 2024, Raydium V3 fully launched alongside revamped constant product market maker (CPMM) pools that support the Token-2022 token program and include a built-in price oracle. Like Raydium’s legacy standard AMM pools, CPMM pools offer uniform liquidity distribution and asset pricing from zero to infinity.
The Memecoin Effect and Pump.fun Synergy
Perhaps the most significant recent driver of Raydium’s volume has been the surge in memecoin trading. Following the U.S. presidential election on November 5, 2024, Raydium averaged almost $2 billion in memecoin trading daily for the remainder of November, almost triple the average the month prior to the election. Moreover, memecoin volume as a percent of Raydium’s total daily volume has steadily increased from 2% in November 2023 to 65% in November 2024, highlighting the increasing importance of memecoin trading to Raydium’s total daily volume.
This trend has been amplified by the platform’s synergy with Pump.fun, a memecoin launchpad on Solana. When tokens on Pump.fun reach a market capitalization of $69,000, $12,000 is added to a standard AMM pool on Raydium, creating a consistent flow of new liquidity and trading opportunities. These pools and subsequent ones with tokens first launched on Pump.fun have generated significant trading volume on Raydium.
Solana’s Rising Tide: Ecosystem Growth and Impact on Raydium
Solana vs. Ethereum: The Battle for DEX Volume Supremacy
Raydium’s success is directly tied to the broader growth of the Solana ecosystem. Solana began challenging Ethereum’s weekly DEX volumes in December 2023, following significant airdrops. These airdrops brought millions in liquidity to the network, spurring a wealth effect that resulted in a massive uptick in network activity. A pivotal moment came in the third quarter of 2024, when Solana’s share of weekly DEX volume across all chains surpassed Ethereum three times and was second to Ethereum all other weeks, signaling a shift in the DEX hierarchy. Since early October 2024, Solana has consistently had more daily DEX volume than Ethereum. In November, this trend accelerated, as Solana had a nearly 50% share of monthly DEX volume across all chains 175% more than Ethereum’s roughly 18% share.
Solana’s high throughput and low transaction costs have made it an attractive alternative to Ethereum, which has faced challenges with high gas fees and network congestion. This has led to a migration of users and liquidity to Solana-based DEXs like Raydium.
User Experience and Performance Advantages
The platform’s ability to process transactions quickly and at a low cost has been a significant draw for traders, especially those engaged in high-frequency trading or dealing with smaller transaction sizes that would be uneconomical on Ethereum due to gas fees. Moreover, Raydium’s user interface improvements, particularly with the V3 launch, have made it more accessible and user-friendly. This ease of use, combined with Solana’s performance advantages, has created a compelling value proposition for users, contributing to Raydium’s growing market share.
Closing Summary
October was Raydium’s first month as the number one DEX by volume across all chains. marking a significant milestone in the evolving landscape of decentralized finance. This change reflects both the relative strength of Raydium to other DEXs on Solana and Solana’s increasing share of global DEX volume (49% in November 2024). In November 2024, Raydium consistently captured over 60% of daily DEX volume on Solana, and Solana had a nearly 50% share of monthly DEX volume across all chains, 175% more than Ethereum’s roughly 18% share.
Memecoin trading has been a substantial driver of Raydium’s volume, with memecoins accounting for an all-time high of 65% of Raydium’s monthly volume in November. This phenomenon has been amplified by the token launch platform Pump.fun, which adds $12,000 in liquidity to a Raydium standard AMM pool once a token on the platform has reached a market capitalization of $69,000.
Finally, the launch of Raydium V3 has driven increased adoption from both technical innovations like revamped CPMM pools and user interfaces, such as the new portfolio page for users to manage positions. Building on this momentum, Raydium will look to continue as the number one DEX by monthly volume across all chains in the last month of the year before the new year begins.
