Raydium is a project that is attracting attention from users. Have you understood this project yet?
What makes Raydium different from other AMM projects? How can you own tokens from this Solana ecosystem? Let’s explore with AZCoin after this article!
What is Raydium?
Raydium, built on the Solana blockchain, was once a leading DeFi protocol within the ecosystem and is expected to become a hub for attracting capital. The main advantage of an AMM built on the Solana blockchain is that it will have fast transaction speeds and a large liquidity pool.
However, to better understand Raydium, we need more information and knowledge about market makers and auto market makers.
In the cryptocurrency market, the presence and participation of market makers are almost indispensable. The reason is that this market often has low liquidity, so in addition to users, market makers also participate in providing liquidity.
Raydium’s auto market maker has a similar function, but this project relies heavily on algorithms to automatically set the buy and sell prices of assets. This algorithm is built based on the formula below in combination with price data from the order book.
K = Y * X. Where: X and Y represent the number of tokens mined and reserved. K is a constant product.
What is RAY token?
RAY serves as the inherent utility token within the Raydium ecosystem. Its initial supply (launched on February 21, 2021) is capped at 555 million tokens. The development team has been allocated 20% of the total supply, locked for up to three years to prevent developers from selling them.
One-third of the token supply of RAY (188 million) can be mined. The block rewards are expected to halve every six months. Additionally, 0.03% of transaction fees on the platform are sent as rewards to stakers.
Development Team
Launched in February 2021, the Raydium ecosystem is developed by an anonymous founding team using pseudonyms suffixed with “ray”:
- AlphaRay: Manages overall business development, operations, and product direction for Raydium.
- XRay: Chief Technology Officer and manages the development team.
- GammaRay: Chief Marketing Officer responsible for Raydium’s marketing and communications.
- StingRay: A senior and experienced developer who manages the on-chain order book for the project.
- RayZor: A professional smart contract developer who ensures the safety of funds on Raydium.
Raydium’s team of experts come from diverse backgrounds in marketing, algorithmic trading, blockchain development, mathematics, and more.
What are the highlights of Raydium?
Other AMMs like Uniswap, Sushiswap can only access liquidity within their own pools. Platforms operating on Ethereum often experience slow transactions and high gas fees. Raydium has optimized these limitations better. Specifically:
Advantages of Raydium Over Other AMMs
- Faster and cheaper: Raydium leverages Solana’s efficiency to achieve faster transactions than Ethereum and gas fees that are a fraction of the cost of Ethereum.
- Access to Serum Orderbook liquidity: Raydium allows users to tap into the liquidity of the Serum Orderbook, currently the most liquid DEX on Serum.
- Comprehensive trading interface: Raydium offers a full-fledged trading interface for users who want a more professional trading experience (TradingView charts, limit orders, etc.).
- IDO platform: In addition to being an exchange, Raydium is a platform for other projects to host IDOs. Raydium’s previous IDO format allowed everyone to participate and purchase project tokens (AcceleRator).
- Ticket-based IDO mechanism: However, this mechanism may not have received positive feedback, so it has been replaced with a ticket-based mechanism and a lottery based on the amount of RAY staked by users.
Raydium Features
The Swap feature provides a quick and easy way for users to trade, similar to other AMMs like Uniswap or Sushiswap.
The Trade feature offers more advanced trading options like Limit Orders, Market Orders, etc. Since Raydium integrates with Serum, users have access to Serum’s liquidity (which is known for its high liquidity).
This differs from Limit Orders on AMMs like Uniswap and Sushiswap, where liquidity is still limited to the pool. If an order is too large for the liquidity pool, slippage can still be significant.
Raydium Fee Mechanism
When users trade or swap on Raydium, a 0.25% fee is charged on the transaction, which is distributed as follows:
- 0.22% is sent back to the liquidity pool and acts as a reward for liquidity providers.
- 0.03% is sent to the staking pool and serves as a reward for those staking RAY tokens.
RAY Token information
Key Metrics for RAY
- Token Name: RAY Token
- Ticker: RAY
- Blockchain: Solana
- Token Standard: SPL
- Contract Address: 4k3Dyjzvzp8eMZWUXbBCjEvwSkkk59S5iCNLY3QrkX6R
- Token Type: Utility, Governance
- Total Supply: 555,000,000 RAY
RAY Token Distribution
- Mining Reserve: 34%
- Partnerships and Ecosystem Development: 30%
- Team: 20%
- Liquidity Provision: 8%
- Community Fund: 6%
- Advisors: 2%
RAY Token Sale
RAY Token will conduct a Community Pool on Bofida.
RAY Token Release Schedule
- Mining reserve: No information.
- Partnership & Ecosystem: No information.
- Team: Locked 1 – 3 years.
- Liquidity: No information.
- Community Pool: Locked 1 year.
- Advisors: Locked 1-3 years.
RAY Token Use Cases
RAY tokens can be used for the following purposes:
- Governance: RAY token holders can vote to influence the platform’s decision-making.
- Earning Fees from Raydium Pools: RAY holders can stake RAY to earn a portion of the trading fees generated from Raydium Trade and Raydium Swap.
- Farming Rewards: RAY tokens are used as rewards for farmers.
How to earn and own RAY tokens
Currently, you can only buy RAY on exchanges that support RAY tokens, such as Serum and FTX. If you are a beginner, you can check out the promotions for cryptocurrency trading on the exchanges that we introduce on the best crypto exchanges 2024 page.
Raydium’s Current Situation
At its peak in November 2021, Raydium’s TVL reached $2.2 billion, indicating significant initial interest. However, in 2023, Raydium’s metrics declined, particularly after the collapse of FTX.
According to DeFiLIama, Raydium’s TVL is currently just over $160 million, with a market cap of $280 million and a 24-hour trading volume of $13.9 million.
Conclusion
The above are the information about the Raydium project and the functions that this platform is providing to the market. We sincerely welcome your attention and comments through the contact or comment section.
Hopefully, through this article, AZCoin has provided users with the most comprehensive overview of the name that once made waves in the DeFi market many years ago.
I am Tony Vu, living in California, USA. I am currently the co-founder of AZCoin company, with many years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
Email: [email protected]
