Original title: Raydium's Rise to the Top

Original translation: Ismay, BlockBeats

The following is the original content:

Jack Kubanek:Hello everyone, welcome back to another episode of Lightspeed. I'm your host Jack Kubanek, and I'm joined today by Raydium developer Infra, an anonymous developer who runs the Labs entity for Raydium. Raydium is a DeFi protocol that has been running on Solana for some time and has recently gained a lot of attention. Infra, thank you very much for joining Lightspeed.

Infra:Thank you for having me, it's great to be here.

Jack Kubanek:What is your day-to-day job at Raydium?

Infra:A lot of it is operational oversight, including management of third-party vendors, whether it's server-side, RPCs, or making sure bills are paid. There's also some strategic work, thinking about future program development or smart contract development, as well as community engagement, marketing, brand positioning, and third-party integrations.

Response to Raydium's fake volume

Jack Kubanek:It sounds like you just described a few different job positions, but I guess that's part of the fun of working in crypto. I want to start with a topic that's been a little bit discussed recently, and this is something we originally reported on in the Lightspeed newsletter, which is Solana's DeFi volume, and Raydium is currently the largest decentralized exchange by volume. I'll throw out some data first, and then we can break it down one by one and explain to the audience what these data mean, where these volumes are coming from, etc.

These data are from the Solana DEX dashboard from Dune Analytics, courtesy of Andrew Hong. In the last 30 days, Raydium has seen $40 billion in volume, with $14 billion coming from the SOL/USDC pool. To provide some context, from June to now (we recorded in early August), Raydium has accounted for 50% to 60% of Solana’s decentralized exchange volume. According to DeFi Llama, Raydium has collected $63 million in fees from trading in the last 30 days.

Meanwhile, a milestone that may not mean much, but people are still talking about, is Solana surpassing Ethereum in certain usage metrics. Ryan Connor, a research analyst at BlockWorks, pointed out that Solana surpassed Ethereum in DEX volume over the past 30 days. This means that more volume has been traded through the Solana decentralized exchange platform than Ethereum over the past month. This data is meaningful because it is not just a 24-hour blip, but has lasted for a month.

Dan Smith, another research analyst at BlockWorks and a former podcast host of mine, mentioned that Solana has also almost caught up with Ethereum and its L2 combination in a statistic he created called "Total Economic Value" (TEV), although this may have changed in the past few days.

When these charts started to spread, people in the Solana community began to celebrate, and perhaps a little mocking Ethereum supporters, because these metrics were in Solana's favor. And Ethereum supporters are starting to point out that Raydium, the dominant decentralized exchange on Solana, has very high volume on some tokens but very little liquidity in standard liquidity pools.

Tens of millions of dollars in volume in the last 24 hours, but very little liquidity. Typically, these would be some type of quick pump and dump, perhaps on a platform like pump.fun. They're accusing this of basically wash trading, where one person makes it look like multiple users are trading to make their meme coin look more legitimate and attract more people to buy, and this behavior is predatory.

So, forgive my monologue at the beginning of the podcast, but this is what we're seeing so far. So, Infra, I wanted to ask you, when you noticed that Raydium's volume was hitting new highs, Solana's DeFi volume was also increasing. What did you find when you dug into this data? What story do you see behind this data?

Infra: I think more context is needed first, and personally, I'm not getting complacent with this data, but I understand why a lot of people in the Solana community are very excited about this. When you think about the progress Solana DeFi has made over the past two years, like this time last year, Raydium was only doing a few million dollars in volume per day, and this was before the FTX crash, when volumes were in the hundreds of millions of dollars. That's a pretty significant retracement.

Raydium has reached $250 billion in cumulative volume, and as you said, $40 billion of that has been in the past month. So I don't know if it's the best way to relate this excitement to the so-called "reversal of Ethereum DeFi," but I do think it's understandable that people are excited about this.

I would say that I'm a little surprised by the discussion about this so-called "wash trading," or this topic. I'm a little surprised by the people who are leading this discussion. Obviously, if they're not outsiders, they've been in this space for a long time and should have participated in meme coins on Ethereum.

They remember looking at the new pool page on Dextools a few years ago and seeing these new pools on Uniswap start to pop up and the volume soared. There are warnings on Dextools about contract permissions and some other issues. This situation is like a trading war between bots, especially in the first few minutes. So either these people have a bad memory or they just think "the moon is always rounder abroad".

I saw an interesting tweet the other day from Prophet from Meta Downy. He said that crypto Twitter is like a person digging a hole, ten people watching him dig the hole, and then a hundred people guessing what the hole will do. It's just a very playful way to say that there are a lot of problems that need to be solved in this space, and there are a lot of areas where we can improve.

But opinions can only go so far, so if anyone has suggestions on how to deal with these issues, we are all open to them. If you work in this space and you know how to identify or question these trading volume indicators, or how to incentivize these behaviors, we are happy to discuss them in any case.

But I would say that in a low-fee environment like Solana, this behavior is more efficient from a cost perspective, and people do do it.

We can think back to a few years ago when Solana didn’t have priority fees, people were just pumping like crazy because the cost of trading was so low and there was no risk. While these numbers may be gamified, I think this statement is probably just based on a bad week. Because I looked at the list of popular pools on Raydium today and the numbers are much healthier. The top 30 or top 40 pools each have millions of dollars in TVL and tens of millions of dollars in daily volume.

A few weeks ago, I tweeted about the incentives behind this phenomenon. I think a lot of it is these third-party UIs that people use to find new meme coins or new pools. These UIs all have a "hot token list", but the process of generating this list is a black box. No one really knows how the API for these hot token lists works and how these lists are generated. Volume is a factor, you can pay a Telegram bot and they will pump volume, but I don’t think this is really as common as people say. I think we should pay more attention to the total economic value (TEV) you just mentioned.

How do you stop pools from deploying spam transactions?

Jack Kubanek: Yeah, I think that last point you bring up is really interesting, and it’s something I stumbled upon in my reporting as well. There are incentives to manipulate the “hot token lists” on these meme coin platforms because there aren’t really curated algorithms like there are on TikTok. In fact, when you visit a platform like pump.fun, it shows some tokens in a certain order.

Infra: There are incentives for people who are looking to make a profit by launching meme coins to manipulate these metrics in order to get on these hot token lists. I spent some time investigating and found that there are indeed some so-called “volume bots” where you can pay someone to create seemingly natural volume to make your meme coin project look more legitimate.

Jack Kubanek: This may not be a good thing, but as you said, this is also the double-edged sword of Solana's low fees. Low fees bring more trading volume and attempts, but also lead to an increase in spam transactions because it is cheaper to run a trading volume bot and do a lot of fake transactions, which can make a meme coin look more legitimate.

Infra: Regarding the question of spam transactions, going back to last year after Breakpoint, WIF was launched in early November, and at that time, the volume of spam transactions surged. By the end of 2023, Raydium saw a surge in spam transactions from the perspective of pool creation.

Before Breakpoint, the number of pools launched per day was only about 100, but this number quickly soared to 7,000 to 8,000 and continued to appear within 30 days.

When you look at these phenomena, you will find that some pools are created by people who deploy liquidity, wait for robots to come in to swap, and then quickly withdraw liquidity, which is actually a "rug pull" scam.

Looking back at the data, look at how much these malicious actors can earn on average from these pool deployments. We found that on average they may earn only one SOL. So we thought about how to increase their upfront costs to curb this kind of spam trading behavior.

So, Raydium introduced a pool creation fee. When you consider the open market fee required to create a pool, plus the creation fee of this pool, it is about 1 to 1.5 SOL, which is enough to greatly curb this behavior.

Over the last six months, we have stabilized at a more sustainable and realistic number of pools per day, around a thousand or so.

Now we face a new problem, which is the nature of dealing with permissionless software. So sometimes it does happen that someone can launch a WIF/SOL pool, and then that pool can trade billions of dollars. But whenever that happens, there are people who have a financial interest in trying to figure out how to manipulate the system.

Are bots real users?

Jack Kubanek: I also want to hear your thoughts on bots, and there has been a lot of discussion recently about how much of the trading volume is generated by bots rather than organic users. Especially when organic users are buying meme coins on Solana and doing various operations, where exactly is the source of the trading volume? What do you think about this situation? The software you developed is being used by bots rather than humans.

But there is also a view that bots are users too. Let's say there are legitimate use cases for software, bots, and they generate revenue for businesses. So what do you think about bots? Or where do you stand in the debate about whether to develop software for bots or natural users?

Infra:This is something that we, and the entire Solana ecosystem, have been dealing with for the last three years. It goes back to the IDO on Raydium, when there were big token launches, and people were incentivized to be the first to get into the pool to trade. So we've gotten a lot better at dealing with this.

About two and a half months ago, Raydium launched a new constant product market making process. The simplest change is that the opening of the pool happens in the next block. So what we've seen in some launches is that people have bundled pool creation and trading in the same transaction. Create the pool, immediately trade in the pool. If it succeeds, the token is considered successfully launched; if it doesn't, you can try again in other ways.

However, I do think bots often get a bad rap. There are many robots in the ecosystem that actually play different roles. For example, there are liquidation robots in lending platforms, which need to exchange assets on hand in the liquidity pool. On the other hand, users are more familiar with pool snipers, MEV, and other forms of front-running or pinch trading, which are more serious.

We see that Helius is developing a new terminal interface with some MEV protection mechanisms built in. We are also seeing more resources invested in this area, whether it is sending transactions through the Jito transaction package or using trusted RPC endpoints.

In general, liquidity attracts liquidity. When you’re a deployer of a pool, your ultimate goal is to get people to buy these tokens. The fact that in the Raydium V4 pool, these pools currently dominate Solana’s blockspace despite newer, better programs being available, and there are a lot of bots stationed in these pools means there are buyers as soon as the pool is deployed. If you’re launching a new token, this is exactly what you want.

What’s Leading to Raydium’s Rise to the Top of the Solana DEX List?

Jack Kubanek: Why is Raydium’s volume increasing?

Jack Kubanek: Why is Raydium’s volume increasing?

I dug into the data a little bit. This time last year, Raydium was ranked third in terms of volume, neck and neck with number two, mainly in terms of the amount of money moving through decentralized trading protocols on Solana. Orca was number one, and Lifinity was basically neck and neck with it. You mentioned some of what could be wash trading, bot activity, and meme coins. But to your knowledge, what is driving the growth of Raydium taking such a large share of Solana's DeFi volume?

Infra:In short, I think there are two main reasons. First, Raydium has been very focused on building a permissionless infrastructure, while many other teams have chosen to do a whitelisting program through the UI. This means that any token can be used to create a Raydium pool without any restrictions. These tokens can then be traded directly on Raydium's UI, while some aggregators or other decentralized exchanges on Solana may have some whitelisting program restrictions.

Another reason is that when market volumes are down overall, especially in 2023 and its first half, capital efficiency becomes particularly important. Everyone is trying to do more with less capital. This is also why we see Orca's Whalepools product outperforming Raydium. Similar to Orca, Raydium also has a centralized liquidity product, but it was a step behind in market launch. Therefore, it has spent most of this year catching up on this gap. We did see that gap narrow significantly.

But I think what a lot of people overlook or don't anticipate is that constant product pools are a really good product for a lot of different users. First, from a liquidity provider perspective, the product is really easy to use. Second, from a pool deployer perspective, especially for meme coins, the product is really great for long-tail assets.

These assets go from zero to infinity and as the price goes up, liquidity expands, so it doesn't require a lot of upfront capital. And, the most important thing is that you can burn these LP tokens, thereby giving up the right to withdraw the underlying asset from the pool. Almost all of the large token launches on Solana, whether it's BOME, WIF, or POPCAT, have chosen to deploy in a constant product pool, burning these LP tokens, so users know that this liquidity will always exist.

So, I think it's a combination of permissionless infrastructure and simplifying and re-optimizing product-market fit. The re-emergence of this product is very interesting and worth watching.

Jack Kubanek: It sounds like meme coins are a big part of this story, from the examples you gave. One of the main use cases of Raydium is to provide liquidity for these meme coins, and these meme coins are also one of the main stories of Solana's recent leap in various indicators. So the combination of these two does make sense.

Infra: It is. Going a step further, I think meme coins have also had a positive impact on other parts of the Raydium ecosystem. The most obvious example is the pooled liquidity products.

When you have so much flow, like volume that is organically generated through the Raydium pools, and third-party platforms that use the Raydium router, liquidity providers in other parts of Solana realize that, OK, there is a lot of volume that is being traded on Raydium that we might not be able to capture by providing liquidity elsewhere. If you look at SOL/USDC, sole USDT, especially those 0.01% P-level centralized liquidity pools, they are almost entirely organically generated, and they didn't exist a few months ago. Now those pools are approaching $100 million in daily volume.

So, meme coins contribute a lot to the constant product pools, but also very helpful for the liquidity launch of the centralized liquidity products, and we are very focused on being more competitive on assets with larger volumes through these products.

Looking back at the history of Raydium

Jack Kubanek: Okay, I think we can turn to discussing the history of Raydium. From what I understand, in some due diligence that I did, I found that the Raydium team did not seem to appear frequently on the podcast since 2021.

Infra: I’ve done a podcast once, it’s been a while, and I’m a little shy and have a bit of stage fright. I did do a couple of podcasts last summer, though, but nothing as high profile as Lightspeed.

Jack Kubanek: You’ve done a really good job, too. Raydium isn’t a protocol that’s been on podcasts a lot by any means, and it has a pretty interesting origin story involving FTX, like some of the projects on Solana that have been around for a while. From what I understand, Raydium started out as a market making service on Serum, the decentralized exchange that FTX built on Solana. Can you walk me through the early days of Raydium, its connection to FTX, and how you’ve transitioned since 2022?

Infra: Okay, I’ll try to be brief. Raydium was the first AMM to launch on Solana, and it was also the first hybrid AMM. So what is a hybrid AMM? In the early days, it would take idle liquidity and put it into a constant product pool, and then place orders on the underlying order book market (which was Serum at the time, and is now OpenBook). Those orders would follow the underlying fee layer of the Raydium pool, and be quantified and spaced according to the Fibonacci sequence.

A hybrid AMM, before Jupiter, was like an aggregator in that it could pull liquidity from Serum. If the price was better, it could arbitrage itself, keeping the prices between the two protocols close together. But ultimately, I think this is a really interesting user experience in early 2021. Basically, for any given asset, you can paste the market ID into any GUI, and it will automatically populate all the open orders, including buys and sells from the order book itself, some orders from the AMM, and some orders from other users. Any user can create limit orders on these pools, either filled by other users or by the AMM.

Of course, concerns about Serum arose after FTX. At that time, Serum's position in the ecosystem also changed. The adjustment of fees, and the subsequent forking of Serum V3 into OpenBook V1, relied heavily on people running commands to process events in these markets to ensure that the order book functioned as expected, so the user experience took a step back at that time.

After the FTX crash and concerns about Serum, a group of Solana developers, mainly Mango Max and a few other teams that were using Serum as underlying infrastructure at the time, about a few dozen teams, decided to fork Serum and launch OpenBook. Raydium also migrated all of its new pool creations as well as some of its old liquidity pools to OpenBook and continues to use it. I think this is one of those projects that can only be realized on Solana, but many people may not know it exists yet.

Jack Kubanek: Can you quickly explain what OpenBook is?

Infra: Of course, OpenBook is a community fork of Serum. It is used by many different decentralized trading platforms as well as some professional protocols running on Solana. The idea is to make OpenBook a community-run project that can serve as a base layer for Solana DeFi. Its code is complete and battle-tested, so it is widely used throughout 2023.

Later, another order book project, Phoenix, was launched, which provided some different technical solutions to the problems that OpenBook was dealing with. Now, OpenBook has grown into an independent team, from a community project to something bigger, and has launched a new version of their order book in the past few months.

Jack Kubanek: The reason you forked Serum is that despite the misconduct of FTX, from what I understand, the technology itself is actually good. For traders, it works well, so you feel the need to continue to continue a version of this technology, that's your idea, right?

Infra: Yes, it's that simple.

Jack Kubanek: Okay, I interrupt you, but after you mentioned the creation of the order book, how did Raydium develop to where it is today?

Infra： I mentioned product-market fit, and Raydium actually went through two or three transformations. The first was the integration of the order book, which became a differentiating factor. But then with the advent of what we call the "meme coin craze", many markets were not suitable for OpenBook or order books. There are some technical factors that can be discussed, but the main problem is that these meme coins are long-tail assets, and the minimum order quantity and price tiers of all orders need to be set in advance, and no one knows what the final transaction price will be. The underlying market of the AMM is also unable to configure orders in a reasonable way for users.

At the same time, OpenBook launched its v2, which is a completely different program. Raydium’s AMM v4 version (the constant product pools that most people use on Solana), in AMM v4, these pools were changed to state 6, which means they support native trading within the pool, as well as adding and removing liquidity trading, and this liquidity is no longer shared with other places.

Jack Kubanek: Yes, hybrid AMMs can share liquidity or not. This feature was turned off because its use cases have expanded beyond the original demand. Indeed, it is very difficult to make markets or create liquidity for meme coins, which may be part of the reason. Can you walk me through the challenges of filling orders for these very volatile liquidity tokens that may only exist for one day?

Infra: The first thing to remember is that constant product pools are passive market makers. But the orders that Raydium does on OpenBook or Serum at the time, whether it's market making or trading, are similar to the orders that are done through an AMM. It's just replicating that long-tail liquidity somewhere else. So if you're using the GUI (graphical user interface) of OpenBook or Serum, you can see the orders there. Or if you're a protocol that needs to do liquidations, you can use the liquidity in the order book, in addition to the liquidity in the pool. So it's not as high-end in terms of sophistication as the market making strategies you see in centralized exchanges, but it does support atomic swaps.

If there's a big swap to be done in the Raydium pool, it can pull liquidity from OpenBook and then do the swap natively within the pool, update the price, and then re-place the order. There used to be a UI that was developed by Skynet called OpenSerum. You could go in and look at any market and see Raydium's orders being placed and replaced in real time, along with all the other liquidity in the market. I think that's one of the easiest ways to understand how this system works.

Ultimately, we decided to move away from this system. This program is already quite old on Solana, almost four years old. It is a pre-anchored program that contains a lot of clunky code related to Serum and OpenBook. It also does not support Token 2022. Therefore, in late 2023 and the first half of 2024, we spent a lot of effort developing a new constant product pool that meets Solana's current technical standards while being able to support some of the new updates, especially Token 2022.

Jack Kubanek： That sounds reasonable. I'm curious, in your overview of Raydium, you mentioned that initially you were optimizing for trading on Serum, and now many of the pools on Raydium are meme coin pools. I'm wondering, between November 2022 and today, at what point did you realize that meme coins were going to drive a lot of activity and that you really needed to optimize for that kind of user behavior?

Infra： There were three main factors at the point where that transition really became more apparent. The first one was what I mentioned earlier, when we saw the number of pool creations skyrocket from a few hundred to seven or eight thousand overnight, that really exposed that Raydium's DApp infrastructure was not sufficient to handle that growth in activity. So if you were using Raydium at the end of last year, you were using what we call version 2 of the DApp. We've actually been working on version 3 of the DApp for about a year. And that's when we realized that we had to launch this new version immediately.

A lot of things happened behind the scenes during this process, such as the ability to scale the system to support this increased load. You could say that Raydium's second version of the application was like the Leaning Tower of Pisa built on a bowl of pasta. It was teetering under the load and was almost unusable.

Another factor is that meme coins break the original structure in a lot of program development. In particular, they usually have a lot of decimal places. When AMM was originally designed, it was to support token A and token B with six or five decimal places, and these two numbers determine what the LP token looks like. So when you interact with these programs, a lot of calculations are done inside the system. If you suddenly use token A and token B with 15 decimal places, it will cause the whole system to be in chaos.

The first time this happened was actually before November 2023, around the time Bonk was launched, which was early 2023. There was an initial small-scale meme craze at that time. This frenzy continued in fits and starts for most of the next year. Then in early 2024 there was a significant increase in activity, and so far I don't think it's showing any signs of slowing down.

Jack Kubanek: Did you just say "the leaning tower of Pisa built on a bowl of pasta"?

Infra: Yeah, that's basically it. It's a metaphor we use internally as a joke. If you haven't used Raydium in a while, I recommend checking out the new DApp. It's faster, better, and has a smoother user experience. The bad days of Raydium version 2 are over, try the new DApp now, transactions are super fast. The pool page is now super smooth. We've rebuilt it all from front end to back end.

Partnership with pump.fun

Jack Kubanek: Now that we've dived into the meme coin aspect, I want to talk about another aspect, a partnership that has driven a lot of users to Raydium, which is pump.fun.

It can be said that pump.fun is one of the hottest applications in the first half of 2024. It has a feature where you can issue a meme coin for $2 on pump.fun, which is very low risk. If the liquidity of that token reaches a certain level on this bonding curve, in simple terms, if enough people buy this token, then a portion of the liquidity will be put into the Raydium pool, and then it can be exchanged on Raydium. So, I'm curious to understand how the partnership between pump.fun and Raydium started?

Infra: I think these people really like meme coins. When you look at the resources they've put into making the meme coin creation experience more fun, everyone has an opinion about pump.fun. When a protocol is as successful as theirs, you'll find that it tends to get polarized reactions. Some people will like it, and some people won't. But they've done a lot of innovation, like launching a live broadcast feature for people who want to issue meme coins. I think that's crazy.

I don't have a lot to share about the origin story of this collaboration. But I've used pump.fun, I've looked at some data, talked to them, and been introduced to them. I feel like they really know what they're doing and are working hard to make sure they're well positioned in the meme coin market.

Jack Kubanek:Yeah, I think pump.fun is a really great protocol that leverages Raydium's underlying pool infrastructure and does something different. A lot of people's first reaction might be, "Oh, all your volume is coming from pump.fun." But in fact, the vast majority of these tokens, close to 99%, never make it to Raydium. And those that do make it to Raydium usually have a lot of volume at the beginning, but whether they can maintain the volume is not certain.

Infra:pump.fun really solves a problem, which is the initial bot problem. Now people have the opportunity to buy these tokens before the official launch without having to compete with pool snipers or other people on the UI. At the same time, it also acts as a filter for these assets. Once a meme coin reaches a certain maturity, that pool will be officially launched. This inadvertently becomes a huge garbage filter for the pools that eventually go public on Raydium. So, I really like this partnership and I'm also very happy that they chose Raydium to launch this product.

Jack Kubanek:That's interesting. I remember when we were talking on Telegram, you mentioned something similar, that the main volume usually happens on the first day, and then on the second or third day, the volume of these meme coins drops off significantly. Are there any trends you see in the data when you look at these tokens from pump.fun to Raydium?

Infra:This is data collected a few weeks ago. Generally speaking, a lot of people talk about capital dispersion and dilution, people jumping from one project to another very quickly. For some assets, they have some staying power, and for others, it's less. The general trend at least shows that the volume is very high and sustained in the first 24 to 48 hours, and after that, with a few exceptions, the volume usually drops significantly. However, there are also some assets that have volume rising again for various reasons.

What do you think of meme coins?

Jack Kubanek：As we summarize this data, we're trying to get a better understanding of how the market works. I also wanted to ask you, as someone who works on this infrastructure every day, your main job is to build infrastructure for trading meme coins, and you can see this in the data. I'm curious what you think about meme coins as someone in this position? How do you see this trend?

Infra：First of all, I want to say that this has been one of the most interesting times I've had on Solana. I think meme coins have gone beyond decentralized exchanges. Now you see these tokens in lending platforms and other primitives. You see teams building infrastructure to short these tokens, or use them as collateral, and do all kinds of operations.

I agree with many people that meme coins do provide a great way to participate in different social movements or trends. With the amount of content that society generates every day, this content can be quickly converted into meme coins. In the long run, I think they are likely to continue to exist.

As to whether they will maintain their current popularity, I don't think anyone really knows the answer. However, I also agree that many people in the space feel similarly that these trades are a bit like PVP. We have discussed that wash trading is a problem, so there will definitely be some people who lose money on these trades.

Overall, if I had to sum it up, I would say that if it's a yes or no question, I'm in favor of meme coins. It's a qualified yes though. People do tend to lose money on meme coins. If you're not willing to take a loss on your investment, don't day trade them.

If I were to defend them, Ryan Connor, a research analyst at BlockWorks, and I have discussed a similar point before, which is that people do lose money on sports betting, but sports betting platforms still have huge revenue. So you don't necessarily need to make people money to keep them interesting. I'm also curious if meme coins can survive a bear market.

Because what we're seeing right now in the pump.fun world is in a market where prices are rising. More addresses are being added, but if the current market continues to be volatile, if we go into a bear market, I'm not sure if that will be the case, but it will be interesting to watch. If the market gets bad, will meme coins still exist? Or is this just a bull market phenomenon? I think it's an open question.

I've discussed this with others as well, and I do think that the expectation is that both in a bear market and a bull market, the expectation is that the volume will go down. But I can imagine that in a bear market, there will still be a continued launch of new tokens or meme coins, they just may not get as much attention as they do now. As I mentioned before, there is a lot of content that people can create these meme coins with. For example, even if the world is tense, if you pick any social media platform, you will still see Web2-type memes being created about various events.

I think meme coins are more than just a pure speculative vehicle. And, I've been in this space for a while now, and I recall that token launches in general, especially new assets launched in bear markets, tend to do very well in bull markets. I think part of the reason why meme coins have attracted so much attention in this cycle is because a lot of people have become tired of high FDV governance token launches. That's my view.

Jack Kubanek: That's an interesting point. To be honest, I'm not particularly interested in meme coins out of personal bias. I don't seriously own any meme coins, except for buying some for writing newsletters, that's my position. However, if I were to think about this issue more deeply, I think meme coins are not yet fully developed, and the infrastructure for people to trade them is not very complete.

Infra: There was a new app released recently, I can't remember the name of it at the moment, but it allows users to buy meme coins with fiat currency using credit cards and other methods. There are also some other ways you can think about, for example, in addition to the popular token list we discussed before that incentivizes people to increase trading volume, what if there is an algorithm similar to the "Recommended for you" page that recommends meme coins? If you believe in the future of meme coins, there may be more infrastructure to be built. However, this is still an open question. Anyway, as the old saying goes, the way to make money in the gold rush is to sell picks and shovels, and Raydium is indeed in the business of selling "picks and shovels."

Raydium’s Future Development

Jack Kubanek:To wrap up, I want to ask, we’ve talked about the future direction. Right now on Solana it’s still a meme coin world. If the popularity of meme coins decreases, let’s say in three to six months, people are no longer interested in trading them, then what is the next direction for Raydium? What business lines are worth looking forward to after meme coins?

Infra:This question will be answered in a more formal way in the next few months, but we are currently working on further decentralized components of the DApp. This project involves upgrading the governance model, which is a hub-and-spoke governance model built into the Raydium DApp, including liquidity mining indicators and bribery mechanisms, while gradually adjusting various parameters of the protocol itself at different time intervals, such as global inflation rate, pool creation fees, token buyback and destruction ratios, and even fee switches. This is a larger project that has been in the works for some time, and the goal is to let the free market determine the balance of these factors and iterate from there.

In addition, I think there is a lot of room for support on the lending side, especially for long-tail assets with deep liquidity. Raydium is also the main oracle provider or publisher for many assets on Solana, so we are also working on this. In general, these are some of our high-level thoughts.

Another thing to mention is the liquidation issues involved in what we might call "Black Monday" yesterday, especially perpetual contracts and spot trading. From a protocol level, this way of trading allows you to not worry about getting into bad debt or liquidation issues.

Finally, we are also working on additional tools for pool creators, such as the ability to lock LPs, and the ability to separate fees from LP tokens, allowing pool creators to destroy their underlying equity and continue to earn fees. In the past week or so, we have also been experimenting with introducing new fee tiers for these pools to continue to expand the functionality of liquidity providers.

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