What is Raydium?

Raydium is an automated market maker (AMM) and liquidity provider that operates on the Solana blockchain for the Serum decentralized exchange (DEX). It distinguishes itself from other AMMs by providing on-chain liquidity to a central limit orderbook, which means that funds deposited into Raydium are converted into limit orders on Serum’s orderbooks. This unique approach allows Raydium liquidity providers to access all of Serum’s order flow and existing liquidity. The native utility token of Raydium is RAY, which is used for staking to earn protocol fees, receiving IDO allocations, and participating in governance votes on protocol decisions.

How does Raydium work?

Raydium operates by taking all the tokens accrued in its liquidity pools and placing orders on the orderbook according to the constant product invariant. This allows Raydium to provide liquidity to traders at a variety of prices. For users who do not require the orderbook but enjoy low trading fees, Raydium has implemented a feature for users who just want to swap their tokens. Liquidity providers can generate additional rewards for contributing, with key pools being incentivized with RAY tokens. Raydium also includes a limited governance model, allowing stakers of RAY to participate and vote on community proposals and amendments.

What are the potential use cases for Raydium?

Raydium seeks to provide a suite of features that contribute to the evolution of DeFi on Solana. Users have the ability to swap or trade, potentially earn through fees and yield farms, and provide liquidity for any SPL token. Raydium also enables the permissionless creation of liquidity pools and farms, allowing projects to launch and bootstrap liquidity in a decentralized manner. The RAY token is used in staking with the potential to generate yield from trading fees, the possibility to stake RAY for multipliers on yield, and participation in governance votes on community proposals and amendments.

What is the history of Raydium?

Raydium was launched on February 21st, 2021 with 555,000,000 tokens created at genesis. The team behind Raydium includes AlphaRay, who leads overall strategy, operations, product direction, and business development, XRay, the Chief of Technology and Dev Team leader, and GammaRay, who heads up marketing and communications. The team has backgrounds in algorithmic trading in commodities, market making and liquidity providing for cryptocurrency, and technical analysis and discretionary trading. Raydium was built with the intention of addressing market needs for an order book AMM to aggregate liquidity, and the team has been working towards this since the summer of 2020.