Raydium’s volume growth raises eyebrows

Atsuko Sato’s new dog named Neiro is causing a stir in memecoin markets

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Raydium and Adobe stock modified by Blockworks

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Howdy!

In all the excitement about the 50th Lightspeed, I forgot to wish you all a happy National Chicken Wing Day yesterday.

I celebrated by getting $1 boneless wings after work at the Popeye’s next to Madison Square Park. They were… adequate. Anyways:


Raydium’s volume growth raises eyebrows

Solana has been pulling off something of a metrics coup versus its main foil recently, passing Ethereum in trailing 30-day volume and in a combined fees-and-tips metric that Blockworks Research’s Dan Smith dubbed “total economic value.”

As I’ve written before, Solana’s impressive DeFi stats are largely being headlined by Raydium, a decentralized exchange (DEX) and automated market maker (AMM). In early 2024, Raydium was seeing between $1 and $2 billion in volume most weeks. Last week, it churned through $12 billion, according to a Dune dashboard.

But not everyone was ready to give Raydium its flowers.

Some industry watchers pointed out that Raydium pools, which are pairs of crypto assets to which users can provide liquidity in exchange for yield, often have very high volume with very low liquidity. A quick scan near the top of the protocol’s “standard” liquidity pools shows one apparent memecoin with $45 in liquidity but over $20 million in volume over the past 24 hours. That particular token is now illiquid after a steep sell-off within the past 24 hours, according to DEX Screener data.

Others were quick to chalk these sorts of irregularities up to fake volumes being used to legitimize memecoin projects. 

“My guess is the meme deployers are just wash trading with bots to make it look like their token has a lot of organic volume so they can trick people into buying it. Absolutely terrible behavior, but I’m sure it generates a ton of fees for Raydium,” Moonwell contributor Luke Youngblood wrote on X.

Wash trading is a practice whereby one entity will move crypto between wallets it controls to give the illusion of organic trading. A quick Telegram search revealed multiple Solana “volume bots” that promise to artificially inflate the volume for certain tokens. 

One of these bots has a Telegram channel with over 12,000 subscribers, and charges up to 60 SOL, worth over $10,000 at current prices, for a six- or 24-hour volume pump. The bot requires users to create a Raydium pool for their token and promises to create up to 28 transactions per minute.

When I got in touch with Infra, an anonymous contributor to Raydium, they emphasized that anyone can use the protocol without permission — as opposed to some crypto platforms that require whitelisting, or gaining approval from a platform to operate on the platform.

“This allows for scalability, while other platforms were still whitelisting,” Infra wrote in a text. In an X thread, they added that memecoin platform ranking systems create volume incentives which “aren’t inherently malicious but are a byproduct of permissionless ecosystems.” They also said that nearly 1,000 Raydium pools have been launched daily over the past month. 

Infra told me that Raydium routing has proven popular lately with liquidity providers (LPs), especially ones who want to gain simultaneous access to routing from the DEX aggregator Jupiter. Routing refers to the route trades take across liquidity venues to achieve optimal prices. This is all controlled by algorithms tasked with speedily analyzing different paths trades can take before they happen.

“We have seen LPs move from other DEXs where flow primarily comes from Jupiter,” they wrote.

There seems to be reason for suspicion regarding at least some of Raydium’s volume stats. Fee revenue, which is real money being brought in by businesses, is arguably a more relevant figure to care about. 

Raydium brought in over $4 million and $2 million in revenue from its trading volume in June and July, Infra said on X.

— Jack Kubinec

Zero In

I looked away from futarchy for two seconds and this happened.

META, the native token of the “futarchal” MetaDAO, has tripled in price over the past week. MetaDAO is pioneering a form of crypto governance where proposals are settled by markets. Its anonymous founder metaproph3t has posted several times about raising funds for the project on X in recent weeks.

“More buyers than sellers,” metaproph3t responded to my direct message asking about the price action.

— Jack Kubinec

The Pulse

Wow, new doge! Very scam. Such mean.

Atsuko Sato, the owner of Kabuso — the Shiba Inu behind the iconic DOGE meme — has adopted a new dog named Neiro, causing a stir in the memecoin markets. Kabuso, who gained fame as the face of Dogecoin, passed away peacefully at the age of 18 in May 2024 after battling leukemia and liver disease. Following Sato’s announcement on X, hundreds of Neiro-related tokens were quickly minted on the Solana blockchain, amassing nearly a billion dollars in trading volume within 24 hours.

But of course, we can’t all just be nice to each other and enjoy some dogs on the internet. Instead, the frenzy quickly turned into a battle between two of the top tokens (both named Neiro), with each claiming to be the original. One launched on pump.fun, reaching a $59 million market cap with $355 million in trading volume in just a day. The other was endorsed by Solana influencer Ansem, causing it to spike to a $123 million market cap.

Sato soon took to X to tell users, “I see many tokens related to Kabosu and Neiro. To clarify, I do not endorse any crypto project except $dog because they […] are committed to doing only good everyday, charitable works, and Doge culture.” She warned, “Please watch out for token scams.”

The backlash against Sato was instantaneous. Users like @metaversejoji responded, “let us make money in peace please.” @0xBold commented, “well you didn’t endorse $DOGE either and thats at 18b so.” Others were more blunt, with @ShockedJS chidding, “Cool no one cares,” and @mezoteric adding, “Cope harder.” Some, like @lupoxbt, were defensive, saying, “stop fudding my bag lady,” while others like @notscp1715 lamented, “This is why we can’t have nice things.” @defidoan echoed, “No one cares, you can’t control it now,” and user @schizohustler harshly declared, “your dog is dead.”

@ifightx, one of the few users to stand up for Sato, seemed to do so with selfish intent, saying, “Guys you can’t say ‘cope harder’ and’ no one cares’ to the actual owner. The doge narrative will die with the behavior.”

Yeah. The narrative. That’s what matters. All I can say is big wow, Solana. Big wow.

— Jeffrey Albus

One Good DM

A message from Infra, an anonymous contributor to Raydium:


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