Raydium

Raydium is an automated market maker and liquidity provider on the Solana blockchain, and RAY is its native token. It launched in 2021 and was one of the earliest significant DeFi protocols on Solana, originally designed to route its liquidity into the Serum central limit order book so that automated market maker liquidity and order book liquidity could share the same market.

How Raydium works

Users deposit pairs of tokens into liquidity pools and earn a share of trading fees, while traders swap against those pools. Raydium supports both constant product pools and concentrated liquidity pools, the latter allowing providers to focus capital within a chosen price range for greater efficiency. The protocol also runs a launchpad function and yield farming programmes where projects distribute rewards to liquidity providers. RAY is used for staking and to capture a portion of protocol fees.

RAY has a maximum supply of 555 million tokens, all issued as total supply, with roughly 270 million in circulation. As an SPL token on Solana, it depends on Solana's proof of stake consensus rather than operating its own chain.

Role in the ecosystem

Raydium remains one of the highest-volume decentralized exchanges on Solana and has been a primary venue for new token listings on the network, particularly during periods of heavy meme token activity. Its position shifted after Serum ceased operating following the FTX collapse, and the protocol adapted by focusing on its own pools and integrations with Solana aggregators. It is frequently the underlying liquidity venue that Solana routing services trade against.