Raydium (RAY) is an on-chain order book automated market maker (AMM) built on the Solana blockchain that shares liquidity with the Serum decentralized exchange. The Raydium mainnet launched in February 2021. ^[1][11]

Overview

As an AMM, Raydium enables digital assets, such as cryptocurrencies, to be traded in a permissionless way through the use of liquidity pools, which have emerged as one of the main tools of Decentralized Finance (DeFi). Liquidity pools rely on individuals, referred to as liquidity providers, who lock their assets in a liquidity pool smart contract. These locked assets can then be utilized as the trading pair within a given market for traders on the decentralized exchange. ^[9]

Raydium combines the flexibility of an Automated Market Maker (AMM) with the reliability of Serum's traditional order book mechanism. This integration supports effective, liquid, and low-fee trading of digital assets on Solana, providing an additional source of liquidity. ^[3][4]

Raydium Technology

Traditional asset exchanges, such as stock markets, maintain a centralized order book recording all buy and sell orders. Buy orders specify the quantity and price of an asset a participant wishes to purchase, while sell orders detail the quantity and price of assets available for sale. The order book matches sellers (market makers) with buyers (market takers), facilitating trading and ensuring market liquidity. The Serum decentralized exchange, supported by Raydium, uses smart contracts to replicate this order-matching process in a decentralized manner. ^[9]

Raydium and Serum Integration

Raydium integrated its AMM mechanism with the order book functionality of Serum to address the benefits and shortcomings of both order book and AMM-based exchanges. The ability to utilize liquidity from either the AMM of Raydium or the order book of Serum should afford traders a more efficient and cost-effective decentralized exchange trading experience. ^[9]

When users contribute to one of Raydium’s liquidity pools, the AMM converts their tokens into limit orders on Serum’s order book for anyone to trade against. When a user makes a swap, Raydium compares prices between Serum’s order book and Raydium’s AMM to execute the most cost-effective trade for the user. ^[9]

AcceleRaytor

Launched in April 2021, AcceleRaytor is an initiative by Raydium to spearhead the growth of the Solana Ecosystem. AcceleRaytor serves as a launchpad for the latest Solana projects to raise capital and drive initial liquidity in a decentralized and interoperable manner while enabling both project and Raydium communities to participate in carefully curated and vetted token offerings. ^[10]

There are two types of pools available for each AcceleRaytor launch project; Community Pools and RAY Pools. This two-tiered approach is meant to provide the wider community with open access to early-stage projects while also rewarding the support of the Raydium community. ^[10]

The AcceleRaytor system, which includes the Community and RAY pool process, will allow projects to accelerate their reach and pace of development, while the potential to quickly IDO and offer LP rewards opens up even greater opportunity for the entire project community - the blog post mentioned^[10]

RAY Token

The RAY token holds the following utility:

• Staking: Holders will be able to stake RAY tokens to generate additional yield earned from trading fees
• The potential to stake RAY for additional multipliers on yield.
• Raydium is likely to also include a limited governance model allowing for stakers of RAY to participate and vote on community proposals and amendments^[5].

Token Distribution

The RAY distribution is projected as follows:

• Max Supply: 555,000,000
• Mining reserve: 34%
• Partnership & Ecosystem: 30%
• Team: 20% (Locked 1-3 years)
• Liquidity: 8%
• Community Pool: 6% (Locked 1 year)
• Advisors: 2% (Locked 1-3 years)

RAY Team

AlphaRay

AlphaRay leads overall strategy, operations, product direction, and business development for Raydium. With a background in algorithmic trading in commodities, Alpha transitioned to market-making and liquidity-providing for cryptocurrency in 2017 and hasn't looked back. After diving into DeFi in the summer of 2020, Alpha saw a market need for an order book AMM to aggregate liquidity, and with the release of Serum, pulled together a team of experienced trading developers to tackle the problem head-on. ^[6]

XRay

XRay is Raydium's Chief of Technology and Dev Team leader. X has 8 years of experience as a trading and low-latency systems architect for both traditional and crypto markets. X designs all of Raydium’s systems and infrastructure as needed. ^[6]

GammaRay

GammaRay heads up marketing and communications while also playing a key role in strategy and product direction. Gamma spent a large part of his career at a leading data analytics and market research firm, working on both client engagements and corporate marketing. Prior to Raydium, Gamma's focus within cryptocurrency has been technical analysis and discretionary trading. ^[6]