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Pump.fun has launched a new decentralized exchange platform, PumpSwap, in response to a significant decline in platform revenues. This innovative system aims to facilitate token swapping while reducing transaction costs. By offering lower-cost and faster transactions, PumpSwap seeks to enhance competition within the Solana 
$131 ecosystem. The platform also stands out with a revenue-sharing model tailored for liquidity providers and token creators.
How Does PumpSwap Work?
PumpSwap operates on an automated market maker (AMM) infrastructure similar to Raydium V4 and Uniswap V2. Users can create liquidity pools for free or participate in existing pools on the platform. This structure provides flexibility in token trading while helping to control costs.
A transaction fee of 0.25% is applied to each token swap. Of this fee, 0.20% goes to liquidity providers, while the remaining 0.05% is allocated to the pump.fun platform. This model aims to offer a more sustainable trading experience for users.
The platform has also completely eliminated the previous 6 SOL token transition fee. This move is expected to reduce the financial burden on users, potentially increasing transaction volumes. Additionally, more liquidity providers are anticipated to participate actively.
Significant Improvements in User Experience
PumpSwap streamlines the trading process by reducing manual steps involved in token transitions. Officials from Pump.fun noted that past migration issues had created challenges for users. The platform highlighted that “Migrations were a major point of friction — they slow a coin’s momentum and introduce needless complexity for new users,” which underscores the need for simplification within the system.
With the introduction of the new platform, the removal of unnecessary fees represents a significant improvement in user experience. Pump.fun also announced plans to share protocol revenues with token creators in the future, which could attract new projects to the platform. The platform aims to regain user trust after a past incident involving a hacked social media account that damaged its reputation.
