Solana’s most profitable protocol Pump.fun is gunning for an even greater share of the chain’s DeFi economy.

Pump.fun, the massively popular memecoin launchpad, just upped the ante. This Thursday, they revealed a new token swaps service, PumpSwap, powered directly by the protocol’s own liquidity pools. This move positions them as a direct competitor against Solana’s existing automated market makers (AMMs) – the platforms that typically handle token trading.

Previously, Pump.fun would “graduate” its most successful memecoins to Raydium, a well-established hub for Solana’s DeFi activity. But now, the plan has changed. Pump.fun will directly inject the initial liquidity for promising new tokens into PumpSwap instead. Founders explained to CoinDesk that this fully in-house approach will lower launch costs and shift how Pump.fun generates its impressive revenue.

According to documents reviewed by CoinDesk, Pump.fun’s creators envision PumpSwap becoming the central hub for open trading on Solana for all kinds of tokens. They’ve already partnered with several token projects who are now planning to use PumpSwap for their liquidity needs.

Will PumpSwap rely on some secret technological edge to attract users – especially those profit-seeking token traders and yield-hungry liquidity providers – away from Solana’s well-established trading platforms? Pump.fun’s founders remained tight-lipped when CoinDesk pressed them on this, asking repeatedly for details.

However, PumpSwap’s real strength, according to its proponents, lies in its distribution. For almost a year, Pump.fun’s booming memecoin market has been a major force in crypto, especially on Solana. Its impressive profits have even influenced how analysts and researchers view revenue generation in crypto protocols.

Just this Tuesday, Pump.fun generated a whopping $1 million in revenue. While that’s a smaller sum compared to the platform’s peak earnings last year, it still easily surpasses the revenue of many major crypto projects, even Ethereum. These kinds of profits create significant buzz and attention, which could give PumpSwap a crucial competitive advantage.

Raydium is likely to feel the biggest impact from this move. Over the past year, a significant portion of Raydium’s trading volume stemmed from pools initially launched by Pump.fun. Now, with PumpSwap taking over, Raydium is set to lose out on this future trading activity. However, Raydium’s recently launched memecoin platform could soften the blow by providing its own source of memecoin activity.

Meanwhile, token creators might also stand to gain in the long run. PumpSwap plans to introduce revenue sharing, giving creators a portion of the protocol’s 0.25% trading fee, according to the founders. However, they remained vague about the exact percentage creators would receive and when this feature would be implemented.