Raydium (RAY)

Basics

• Based in:
• Started in / Announced on: 9-2020
• Mainnet release: 19-2-2021
• A decentralized exchange running on Solana.

History

• From TheTie (25-5-2021):

"Raydium was founded by former prop traders who got into crypto in December 2017 to trade arbitrage strategies on Bitcoin."

Audits & Exploits

• Bug bounty program can be found [insert here].

Bugs/Exploits

• Amount lost has gone up to $4.4M (19-12-2022):

"The account had authority over certain functions of Raydium’s pools, allowing the attacker to drain accumulated trading/protocol fees via the withdraw_pnl instruction. The hacker also changed the SyncNeedTake parameter to increase expected fees and withdraw extra funds."

• From Decrypt (16-12-2022):

"Within hours today, a hacker stole over $2.2 million worth of digital assets from a pool on Raydium, including $1.6 million worth of SOL, according to analysis from blockchain analytics firm Nansen. The hacker appears to have pulled off the attack by using one of the protocol owner’s private keys. It remains unclear how the hacker accessed that information."

Governance

DAO

• From a commissioned Messari report (7-11-2024):

"Raydium has an offchain governance process facilitated via Realms, where users must deposit RAY to participate. A minimum of 1.00 million RAY is required to create a proposal, while each token equals one vote for active proposals. As of the close of Q3, there have been two proposals."

Treasury

• From a commissioned Messari report (7-11-2024):

"4% [of the trading fee is] allocated to the treasury. Treasury fees for CLMM and CPMM pools are automatically swapped to USDC and held in treasury accounts controlled by the protocol multsig. $570,000 was deposited to the treasury in Q3, a 45% decline QoQ from an all-time high of $1 million in Q2. Still, treasury deposits are up nearly three times from their Q4 2023 total of $194,000."

Token

Token Allocation

• From TheTie (25-5-2021):

1. "Liquidity Mining 34%
2. Partnerships and Ecosystem 30%
3. Team 20%
4. Liquidity 8%
5. Community & Seed Funding 6%
6. Advisors 2%

There is a hard cap of 555 million RAY. The total RAY mining reserve consists of 34% of all tokens, or 188.7M RAY. Emissions will last for approximately 36 months, with halvenings occurring every six months."

Utility

• Governance and staking APR (7-11-2024).
• From TheTie (25-5-2021): "0.03% of trading fees will be awarded to RAY stakers."

Buy Backs

• For all pool types, 12% of the fee is allocated to RAY buybacks. From a commissioned Messari report (7-11-2024):

"In the third quarter a record $16 million in USDC (+5% QoQ) generated from protocol fees was spent buying back RAY from the open market. Despite this, the amount of RAY bought back in Q3 declined 7% as the price increase of the RAY token outpaced the amount of USDC spent."

Other Details

1. Stablecoin

Technology

• Whitepaper can be found [insert here].
• Code can be viewed [insert here].

Implementations

• Built on: Solana

How it works

• From a commissioned Messari report (7-11-2024):

"In addition to CPMM pools and its legacy standard AMM pools (AMM V4), which offer uniform liquidity distribution, Raydium offers Concentrated Liquidity Market Maker (CLMM) pools that allow for liquidity concentration at specific price points. CLMM provides lower slippage for traders and higher fee earnings for LPs, though the risk of higher impermanent loss is magnified by this design."

• From TheTie (25-5-2021):

"Unlike other AMMs who are only able to access liquidity within their own pools, think Uniswap/PancakeSwap/Sushi, Raydium provides liquidity to Serum’s on-chain central limit order book, granting ecosystem-wide access to all order flow and liquidity on Serum. With the help of Serum, Raydium has brought order books to AMMs, allowing traders to exchange the tokens they are willing to trade at any price. Traditional AMMs don’t allow you to change your price, so you’re almost always taking the worst price in the market. In addition to that, with so much overlapping liquidity in their different offerings, traders end up paying more for slippage because liquidity is fragmented throughout several different pools. Since Raydium provides liquidity to Serum’s CLOB, anyone on Serum can transact against that liquidity and vice versa. Raydium acts as a market maker, taking all the tokens accrued in its LPs to place a series of orders at different prices and sizes on to the orderbook using an equation called the constant product invariant."

Fees

On Raydium, pool creators can select the pool’s trading fee from a number of fee tiers depending on the pool type:

1. Standard AMM (AMM V4): 0.25%
2. Concentrated liquidity (CLMM): 0.01%, 0.02%, 0.03%, 0.04%, 0.05%, 0.25%, 1%, 2%
3. Constant Product (CPMM): 0.25%, 1%, 2%, 4%

For all pool types, 12% of the fee is allocated to RAY buybacks.

Upgrades

• From a commissioned Messari report (7-11-2024):

"In May 2024, the Raydium V3 application launched alongside revamped constant product market maker (CPMM) pools that support the Token-2022 token program and include a built-in price oracle."

Their Other Projects

AcceleRaytor

• Launchpad for IDOs on Raydium.
• From TheTie (25-5-2021):

"Users can participate in two different types of pools for each AcceleRaytor project; Community Pools and RAY Pools. Community Pools are open to the entire community, allowing anyone to participate whether they have used Raydium before or not. RAY Pools are only available for users who hold a minimum number of RAY tokens and have been staking it on Raydium for a set period of time. There are two primary token allocation models; a first come first serve model and guaranteed proportional model. The guaranteed proportional model gives all participants who contributed within the set time period an allocation proportional to their contributed funds as a percentage of total funds contributed. Any funds that exceed the max cap of the pool will be returned. After raising funds through AcceleRaytor, these projects can launch an IDO through Raydium liquidity pools. This will allow the community to quickly provide liquidity and trading the token. Projects can also offer LP farming rewards for LPs immediately after the IDO."

Fusion Pools

• From TheTie (25-5-2021):

"These Fusion Pools are essentially liquidity pools with two partner tokens from within the ecosystem. This allows for these projects to interact with their user base and reward them, in addition to getting an initial boost from the Raydium community. When tokens are added to a liquidity pool, Raydium issues a liquidity provider (LP) token to track what percentage of the pool the owner of this token represents. These tokens can then be farmed to receive rewards. Projects can also sponsor certain pools by adding tokens to a reward pool to further incentive users to hold project tokens and receive additional rewards while providing liquidity."

Roadmap

• Can be found [Insert link here].
• From TheTie (25-5-2021):

"Q4 2020

1. Ideation and project scope
2. Development of the protocol and iteration on testnet

Q1 2021

1. Development of liquidity pools and staking completed, mainnet launched
2. Website and platform launch
3. Development of cross-chain swap

Q2 2021

1. Research on additional market making models and features in partnership with other protocols

Q3 2021

1. Leverage of external oracles for improved market making
2. Governance model ideation in collaboration with partners"

Revenue

Daily average fees have gone up from $5.2k in Q3 2023 up to 1.8M in Q3 2024, with a high during Q2 at $2.3M.

Usage

• From a commissioned Messari report (7-11-2024):

"Raydium’s share of global DEX volume increased more than 130% QoQ to over 10% as it flipped Orca to become the third-largest DEX by volume share in Q3, trailing only PancakeSwap and Uniswap.

Prior to March 2024, Orca was the leading DEX by volume on Solana largely because it was the first to offer concentrated liquidity pools, which were made fully available in April 2022. Raydium made its Concentrated Liquidity Market Maker (CLMM) pools product fully available in November 2022. From March 6, 2024, onwards, Raydium has had consistently more daily volume than Orca. At the same time, the token launch platform Pump.fun began its rapid growth.

Another catalyst came on March 26 when Raydium released its V3 user interface in beta. This interface introduced a new portfolio page for users to view and manage liquidity positions, a liquidity page that consolidates all Raydium liquidity pools in one place, support for exact swap amounts, and charts for all tradable token pairs."

Projects that use or built on it

• SushiSwap; "A proposal on the SushiSwap forum details a plan to use Raydium as a bridge to bring the exchange onto Solana." (23-2-2021).

Competition

Orca

Pros and Cons

Pros

• Bankman-Fried told Crypto Briefing (24-2-2021):

"Because it provides liquidity on Serum orderbooks, it is able to provide to all the flow on Solana, not just users who seek it out; and it has the flexibility to provide in different ways in the future.”

Team, Funding, Partners

Team

• Full team can be found [here].
• AlphaRay; co-founder

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