Original author: TechFlow
“What did CZ tweet today?”
If you are asking this question, then it is obvious that BSC is one of the few hot spots on the chain in the near future.
As CZ and Yijie become more and more active on Twitter, the gameplay of attracting attention and creating memes has gradually surfaced; at the same time, relying on the powerful secondary traffic capabilities of Binance APP, Binance Alpha is directly placed in the application, which also brings more heat to Meme transactions.
Under the overall bad market conditions, BSC seems to be a latecomer that has caught up first, and what it has snatched away is obviously the previous on-chain popularity of Solana.
Traffic and transaction fee income are the anxiety and desire of every chain.
Under business anxiety, there is bound to be competition between different chains, but in fact, different protocols on the same chain are also competing.
For example, Pump.fun and Raydium each came up with a copy of the other.
Pump.fun does AMM
More than 20 days ago, Pump.fun started working for Raydium and launched a self-built AMM pool, trying to divide the liquidity income that originally belonged to Raydium.
(For details, see Pump.fun has set up its own AMM pool? Its intention to grab Raydiums profits is obvious )
Since the users transaction is first matched on the internal market of Pump.fun, the transaction is completed relying on the liquidity of the platform; when the internal market is full, the transaction will be routed to the external market, which actually relies on the liquidity pool of Raydium.
In this model, Pump.fun has always been Raydiums traffic provider, but is therefore subject to Raydiums rules. Whenever a transaction flows to the external market, Pump.fun needs to pay a portion of the transaction fee, and this portion of the profit eventually flows to Raydiums liquidity provider (LP). Currently, each transaction on Raydium is charged a 0.25% handling fee.
The motivation behind this matter is also very simple: to put it bluntly, Pump.fun, as a traffic portal, has not fully reaped the benefits brought by the traffic.
We mentioned at the time that when the overall environment is not good, not only are the leeks engaged in PVP, but the projects are also fighting each other and competing with each other.
Raydium as Launchpad
And just today, Raydiums counterattack strategy also surfaced.
According to Blockworks , Raydium is launching a token launchpad called LaunchLab, which is similar to a direct fork of pump.fun.
Although Raydiums official Twitter account did not directly mention this new change, there is no smoke without fire. This seems to mean that the tacit understanding of cooperation between Raydium and Pump.fun, which does not require a sense of ceremony, is gradually being broken.
As a spectator, the feeling is very obvious--- since you stole my job, I can also steal your job.
Raydium’s motivation is also very simple. As the backend of the liquidity pool, why not take a step further and get a share of the front-end entry traffic?
But the prerequisite for grabbing a job is to have strength.
For token launch pads like Pump.fun, replicating a similar relatively simple product, the strength may not come from technology, but from capital.
The news further pointed out that Raydium still has about $168 million on its balance sheet, which provides the greatest confidence for copying Pump.fun, that is, investing people and money.
The comments of an anonymous Raydium core contributor in the Blockworks report indirectly prove this point:
“The protocol started developing LaunchLab months ago but shelved the project because it ‘didn’t want the team to feel that Raydium was in direct competition with them.’ That so-called magnanimity seems to have dried up after pump.fun’s AMM plan emerged.”
In other words, while Pump.fun was developing AMM, Raydium was already thinking about developing Launchpad.
This is more like a spontaneous competition and a conscious action to take the business further.
The project parties obviously know better than the leeks that trading is the soul of the crypto business, and it is easier to make money by making a fuss about each link of the transaction.
Of course, it would be best if you have the ability to take care of the entire process, from the entrance to the back end.
Civil War Moat
The AMM pool is essentially an open source design, and a meme coin launch pad is not difficult to implement; since neither side has development barriers in terms of products, Pump.fun and Raydium can do their own business;
The only question is, where are the moats on both sides and what they rely on to win?
Pump.funs moat obviously lies in the traffic advantage brought by user habits. As a Meme coin launch platform, Pump.fun has firmly grasped the attention of a part of users through its unique community culture and user stickiness.
Once this kind of user habit is formed, it is difficult to easily transfer to other platforms. More importantly, Pump.funs user ecology has its own traffic entry attribute, which provides it with continuous growth momentum.
On the other hand, Raydiums moat is built on the transaction rigidity of its liquidity pool. As one of the most important DeFi infrastructures on Solana, Raydiums ecological control power comes not only from its deep liquidity pool, but also from its trading network status on the entire Solana chain.
In other words, Raydiums advantage is not just technical, but the entire ecosystems dependence on it.
However, the strength of a moat is not just a static existence.
In the current environment, Pump.fun and Raydiums respective moats are also facing different challenges:
Whether the traffic of Pump.fun can continue to grow depends on whether it can continue to launch new features and new ways of playing to attract users. Raydium needs to stay ahead in the liquidity competition and further consolidate its ecological position through capital and technology investment.
As liquidity dries up, how many people will join in this civil war?
As the two major protocols compete with each other, a bigger problem emerges:
How many users will participate in this civil war? Is there really enough market space and user base to support it?
Judging from the current market environment, the crypto industry as a whole is in a downturn, with liquidity and user activity significantly lower than before. In this context, both Pump.fun and Raydium are actually competing for a shrinking piece of the pie.
Without new liquidity injection or more leeks entering the market, this competition is actually meaningless.
Whether it is BSC, Solana or other public chains, the competition between chains and within chains is intensifying. Behind this competition, it reflects the industrys desire for traffic and fee income. However, if the overall environment of the entire crypto industry does not improve, this competition may ultimately be short-lived.
For the entire industry, the real solution is not to fight a civil war or an inter-chain war, but to enhance the overall attractiveness of the industry. Whether through innovative product forms, lowering user barriers, or through more extensive education and promotion, attracting new liquidity is the key to solving the problem.
