Preface

Since its launch in 2021, Raydium has been one of the preferred gateways for DeFi users on Solana, holding a solid leading position in the Solana ecosystem’s AMM (Automated Market Maker) sector. In this fast-changing on-chain world, Raydium is not just surviving — it thrives deeply. From basic liquidity pools to concentrated liquidity models (CLMM), and even to innovative structures integrated with centralized order books, every step has been cutting-edge and practical.

What is Raydium?

Raydium is an AMM protocol built on the Solana blockchain, offering users permissionless liquidity pool creation, ultra-low fee lightning-fast trading experiences, and a variety of yield strategies. In its early days, Raydium stood out in a crowded space thanks to its unique hybrid AMM + order book liquidity integration model. It wasn’t just a pure AMM — it could list idle AMM liquidity on the OpenBook order book for matching, allowing on-chain assets to be utilized to the fullest. This was almost the only solution in the Solana ecosystem at the time. Although this hybrid matching function has since been disabled, the foundational design left a profound impact, making Raydium the top choice for many traders and liquidity providers.

Why is Raydium outstanding on Solana?

1. Ultra-fast trading experience

Thanks to the high performance of the Solana chain, Raydium blows traditional Ethereum-based DEXs out of the water in terms of speed. Without waiting for confirmations or frequent signing, users enjoy smooth operation.

2. Liquidity integration, improved matching efficiency

One of Raydium’s key innovations was not limiting liquidity to its own pools but integrating it with centralized order books like OpenBook. This structure gives Raydium trades deeper liquidity and lower slippage. Even though this mechanism is now disabled, it laid the groundwork for Raydium’s superior market-making efficiency.

3. Product diversity, support for different AMM models

Raydium doesn’t stick to a single liquidity pool design but instead offers three main models based on different use cases and needs:

• AMM v4 (Hybrid AMM): The current standard pool type, supporting the broadest range of asset pairs.
• Constant Product Pool (CPMM): Similar to Uniswap V2, suitable for long-tail asset trading.
• Concentrated Liquidity Pool (CLMM): Similar to Uniswap V3, allowing LPs to customize funding ranges for higher capital efficiency.

These three pool types offer different participation modes and strategic options, allowing both beginners and experienced LPs to find a suitable liquidity deployment plan.

Fee Structure Overview of Raydium

Every time users perform a swap or provide liquidity on Raydium, the platform charges a fee. These fees do not just go into the protocol’s pocket — they are meticulously allocated to reward LPs, strengthen the RAY token, and support the treasury’s infrastructure. Let’s break down these mechanisms:

• Transaction Fee (Swap Fee)

A small percentage fee charged on all trades, varying by pool type and settings. The fees are split as follows:

1. A portion goes to reward liquidity providers (LPs)
2. A portion goes to buy back RAY, supporting token value
3. A portion is allocated to the Raydium treasury, used for long-term operations and development

• Buyback Fee

This fee is directly used to purchase RAY from the market and may be burned, effectively managing token value and controlling inflation.

• Treasury Fee

This portion, controlled by the protocol, funds infrastructure development, community incentives, marketing, and protocol security maintenance.

• Pool Creation Fee

Developers must pay a fee to create a new pool, preventing a flood of spam pools. This fee is controlled by protocol multi-signature and is used to support infrastructure development.

Raydium’s Ecosystem Role and Future Potential

In the Solana ecosystem, Raydium has evolved from a simple exchange into a full-fledged DeFi infrastructure provider. Whether it’s trading, liquidity mining, IDO launch platform (AcceleRaytor), or DAO governance, every module is building a fast, secure, and efficient on-chain financial path for Solana users. Key ongoing directions include:

• Promoting adoption and capital efficiency of CLMM

CLMM is a major breakthrough in capital efficiency, and Raydium is actively promoting its usage to compete with mainstream DEXs.

• Enhancing RAY’s utility and value loop

Through buybacks, staking, and governance participation, RAY becomes more than just a governance token in name — it’s a true utility token with real functions.

• Building cross-platform liquidity integration tools

In the future, Raydium may collaborate with other DeFi protocols and cross-chain bridges to further enhance capital mobility and composability.

Summary

Raydium’s success is no accident. It’s the result of precise execution across architecture design, product experience, liquidity strategy, user education, and ecosystem engagement. In the Ethereum world, Uniswap is the unshakable AMM giant; in the Solana ecosystem, Raydium is undoubtedly the earliest, most stable, and deepest DeFi core. Whether you’re a beginner looking to swap some SPL tokens on Solana, or a veteran deploying complex LP strategies, Raydium is worth exploring, using, and even contributing to. In this modular, composable, and cross-chain interactive DeFi 3.0 era, Raydium represents not just an AMM — it’s the strongest liquidity heart of the Solana ecosystem.