Introduction
Raydium.io is a cutting-edge DeFi platform that is a premier automated market maker (AMM) driving liquidity on-chain. Its deployment on Solana ensures low transaction fees and high scalability.
Raydium launched in February 2021, pioneering a hybrid AMM model on Solana by integrating its liquidity pools with an on-chain central limit order book (originally the now-defunct Serum, currently OpenBook). Since its inception, Raydium has processed substantial trading volume and has continued to refine its design to offer a robust permissionless DEX experience on Solana.
Raydium enables permissionless pool creation, leading to a vast number of markets (over 82,000 created historically), although claims about being the 'fastest-growing' or having '1,000 markets opening each day' require context and verification, as many permissionless pools may have low liquidity.
Raydium and OpenBook: A Dynamic Duo in Solana DEXs
Much like Raydium, OpenBook operates as a decentralised exchange (DEX) on the Solana blockchain, providing swift and cost-efficient trading. Functioning as a Central Limit Order Book (CLOB) and serving as the community-led successor to the Serum v3 codebase, OpenBook forms a foundational element in Solana's DeFi landscape. Both DEXs capitalise on Solana's advantages, enabling almost instantaneous trades and token swaps at reduced costs. The seamless integration between Raydium (as an AMM providing liquidity) and OpenBook (as the order book) establishes ecosystem-wide liquidity, delivering users speed at a low cost and a trustless, non-custodial experience.
The Two Pillars of Success in the Raydium Ecosystem
Raydium's ecosystem revolves around two primary components.
1 - Raydium Token Swaps
Users can effortlessly swap tokens utilising Raydium's routing engine (which interacts with its own pools and OpenBook) and permissionless liquidity pools, facilitating seamless market generation and trading.
2 - Raydium Liquidity Pools and Yield
Raydium offers yield farming and liquidity pools, including standard Raydium farms, incentives for Concentrated Liquidity Management Module (CLMM) pools, and permissionless farms. The platform empowers any user to incentivise liquidity providers with rewards in any token via permissionless pools.
Raydium’s RAY Token: Fueling the Ecosystem
The RAY token stands as Raydium's native asset, serving diverse in-protocol functions. Users acquire RAY through contributions to liquidity pools (typically via farming rewards) and staking RAY itself, unlocking additional rewards. It also functions as a governance token, granting ecosystem participants the authority to contribute to platform management.
RAY has achieved wide distribution on Solana, with approximately 160k holders on-chain. RAY is listed on numerous major exchanges, though its daily trading volume fluctuates significantly with market conditions and should be verified on current data aggregators. The RAY token boasts a total supply of 555 million tokens.
The broader Solana DEX landscape
While Raydium remains a foundational AMM and liquidity platform on Solana, particularly with its integration with the OpenBook order book, it operates within a rich and competitive DeFi ecosystem. Users on Solana have access to various trading venues, each with unique strengths.
Notable examples include Orca, another leading AMM renowned for its user-friendly interface and concentrated liquidity 'Whirlpools'; Jupiter, the dominant swap aggregator on the network, which intelligently routes trades across Raydium, Orca, Meteora, and others to find the optimal price for users; Meteora, known for its innovative dynamic liquidity pools (DLMMs) designed for capital efficiency; and Zeta Markets, which caters to users seeking decentralized derivatives like options and perpetual futures.
If you want to dive deeper, checkout our DEX comparisons:
The token distribution is as follows:
Mining Reserve: 34% – 188,700,000 RAY
Emissions will last approximately 120 months, with halvings occurring every six months. A halving means the budget for the maximum of tokens used for emissions during that period will be halved relative to the previous period. The full amount of the budget will not necessarily be emitted during that period.
Partnership and Ecosystem: 30% – 166,500,000 RAY
The allocated tokens for ecosystem development aim to support communities and contributors actively contributing to the growth of Raydium through grants and different campaigns.
Team (1-3 Year lock up) 20% – 111,000,000 RAY
Liquidity 8% – 44,000,000 RAY
Community & Seed 6% - 33,300,000
Advisors (1-3 Year lockup) 2% - 11,000,000 RAY
12% of taker fees on Raydium are allocated to RAY buybacks and deposited in a wallet controlled by the DAO.
Historically, a portion of protocol fees (such as 12% of taker fees mentioned previously) have been allocated to RAY buybacks deposited to a DAO-controlled wallet. However, the specific current fee allocation and buyback mechanism can evolve over time based on governance decisions.
With transparent token distribution and a DAO-controlled treasury potentially funding mechanisms like buybacks conditional on current mechanism), Raydium's governance model ensures community participation and sustainability. Raydium doesn't just address current challenges; it actively contributes to transforming decentralised finance on Solana, solidifying its position as a key player in the rapidly evolving blockchain landscape.
Conclusion
Raydium's DEX and AMM frameworks offer advantages over other Solana platforms. The platform facilitates quick, cost-effective token swaps, trading, and permissionless liquidity provision. Raydium is a promising solution within the Solana ecosystem, addressing existing challenges and contributing to the evolving landscape of decentralised finance.
For SwissBorg and its community, integrating Raydium's RAY token into our app offers significant benefits. By utilising SwissBorg's platform capabilities, RAY token holders can now enjoy the ease of buying, selling, and exchanging cryptocurrencies with 16 different fiat currencies , such as EUR, CHF, and GBP. This integration greatly enhances the accessibility and usability of RAY, promoting wider participation and simplifying the investment process.
