Pioneer of Solana — See how Raydium release the infinite liquidity of on-chain assets
Question 1: Please briefly introduce Raydium to us by using several keywords or sentences to describe the characteristics and features of your project. Under what background was Raydium created?
AlphaRay: Raydium is the first Automatic Market maker (AMM) and liquidity provider built on the Solana blockchain for the Serum decentralized exchange. You can swap, trade, provide liquidity, stake, and yield farm on the platform. Since Raydium provides on-chain liquidity to Serum’s central limit order book, Raydium LPs get access to the entire order flow and liquidity of the Serum ecosystem. Recently we have also announced the AcceleRaytor program, which is the first end-to-end IDO platform on Solana to help new projects raise capital and drive initial liquidity.
Since last summer, our team has been yield farming, staking, and investing in various DeFi platforms. While the growth in the space has been absolutely massive, gas prices have been skyrocketing and become too expensive for average users to use DeFi products.
After speaking with the FTX team, they introduced us to Solana Serum which gave us the inspiration for Raydium. The serum is a decentralized exchange with a central limit order book on Solana, which costs pennies to use. So our team started exploring their functionalities and came up with the Raydium idea late last year.
Question2:Today we’ve got this rare chance to invite AlphaRay to our event. Could you please share with us more about the stories behind your team? What are the opportunities that brought your team members together?
AlphaRay: Our team has been in the crypto quant trading, market-making space for a few years now and is one of the top 20 traders on tier 1 exchanges.
We saw the opportunity to build a real orderbook style AMM on Serum last year which would redefine the experience for everyday DeFi users.
After considering how we might be able to solve some of the key issues by creating an AMM on Serum and Solana, we got to work building and Raydium was born.
Question3: DEX has become an important part of the market because of the popularity of DeFi. What’s your opinion towards the development of DEX now and what will be the future prospect for it?
AlphaRay: This goes back to the key issues our team saw most DEXes are facing:
1) Expensive transaction fees. In a short time, we have seen gas fees jump to a level that completely wipes out potential earnings. Slow transactions exacerbate this as users bid up the price of gas, with failed transactions multiplying losses. As interacting with DeFi becomes prohibitively expensive, we are once again seeing common users left behind.
2) Fragmented market liquidity. The nature of AMMs on Ethereum means that liquidity is fragmented, and liquidity pools on one protocol are walled off from those on others. Without any central order book to aggregate across pools, competition by AMMs for liquidity is intense and users see no benefit from liquidity held on other platforms. This will also be true for shard-based blockchains, like eth2 and Polkadot.
3) Limited DEX features. Many common trading features on centralized exchanges, like limit orders, are difficult to implement efficiently on Ethereum DEX due to slow transaction speeds and prohibitively high gas fees. There is also a lack of trader-friendly UI with features such as TradingView charts.
We think the future development of DEX will be on the path of solving these main issues, and our team is excited to be on this journal to improve overall DEX experience.
Question4: What are some of the advantages and disadvantages of Raydium comparing with Uniswap or Sushiswap which are the AMM DEX we are familiar with on Ethereum?
AlphaRay: Unlike other AMMs, Raydium provides on-chain liquidity to a central limit order book, meaning that Raydium LPs get access to the entire order flow and liquidity of Serum. This has the advantages of 1) having a standard order book that allows for limit orders and trading interface; 2) having shared liquidity across the Serum order book so that Serum users can interact with the liquidity as well as Raydium users being able to take advantage of Serum’s existing liquidity; 3) built on Solana, Raydium enables much faster transactions, significantly lower fees, and enhanced scalability.
Obviously, the Solana ecosystem is still quite young compared to Ethereum, which has more established projects, mature toolings, and infrastructure. There is a lot to learn from our peers in the Ethereum ecosystem but at the same time, we are confident that Solana season is coming as more and more projects recognize the proven high throughput, low transaction fee, and fast confirmation qualities that Solana offers.
We’ve also experienced how collaborative the Solana ecosystem is, as projects tend to focus on what they are good at and focus on growth as a whole in the long term. Raydium will grow with the ecosystem and strive to be the bridge for projects looking to expand to Solana and Serum.
Question5: In February, Sushiswap will launch a proposal called「BONSAI」. According to this proposal, Raydium will cooperate with Sushiswap to support the liquidity asset pool and staking on Serum. If it can pass, what impact will it bring to Raydium as well as Sushiswap?
AlphaRay: We are happy to update everyone that the Bonsai proposal was officially passed on April 3rd with a 99% support rate by the Sushiswap community. Our team is now busy working with the Sushiswap team on integration. Basically, this allows Sushiswap to expand its reach and community to Solana and Serum, with the initial and primary feature of creating new Sushiswap liquidity pools on these ecosystems in addition to existing Ethereum based liquidity pools.
For Sushiswap users, these Solana-based pools would appear as a new page on the Sushiswap UI, named Bonsai. This page would have similar front-end functionality and GUI to current Sushi Farms and Onsen pools, but would simply connect to Raydium’s backend for execution.
A similar SushiSwap page would also be implemented on Raydium’s front-end. It would provide the opportunity for Solana-based tokens that launch on Raydium to have immediate access to Sushiswap, which carries a great brand and deep liquidity. We are very excited about this integration and look forward to bringing value to both Raydium and Sushi communities.
Question 6: In your opinion, what are the advantages and main features Solana has compared with the existing public chains such as Ethereum, Polkadot, and BSC which have already formed a certain scale of the ecosystem? Do you consider Solana to be at a rather passive status?
AlphaRay: We believe Solana has more scaling advantage over other blockchains such as Ethereum, Polkadot, and BSC. Solana can handle 65,000 transactions per second with 400 millisecond block times. Compared to Ethereum AMM’s cost to swap, farm, harvest, and unstake, Raydium costs less than 10 cents for the entire process (vs. costs over $100 on ETH). This level of scalability is very much needed for DApps and especially DeFi products.
While we are still in the early phase for the Solana ecosystem, more toolings and infrastructure are being built out to provide better bridging between different blockchain protocols, and a better user experience.
Question 7: Following the previous question, why does Raydium choose to join the Solana ecosystem rather than the other public chains? What position does Raydium hold in the Solana ecosystem?
AlphaRay: We chose to build on Solana because of it’s proven scalability which results in extremely low fees and high transaction throughput. We cannot stress how important these are for financial products that Raydium is building out.
We want to be the go-to place to launch tokens and initiate liquidity to the Solana ecosystem by bridging platforms and liquidity with the evolved capabilities of Solana.
Question8: For value capturing, what is the tokenomics of Raydium, and how do you stimulate the users to hold your tokens in the long run? What are some application scenarios of your token?
AlphaRay: RAY token has a total fixed supply of 555m. Total RAY mining reserve consists of 34% of all tokens, and emissions will last for approximately 36 months, with halving occurring every six months. The initial circulating supply was 2%, and emissions at launch are approximately 1% per month and will increase as user number and LPs grow, then slowly decline according to the 36-month emission schedule. More info can be found here: https://raydium.io/info/
RAY token is used as one of the base pairs on Raydium AMM pools and provides yield farming rewards to Ray LP. Users can also single-stake RAY to earn yield without IL risk.
RAY holders enjoy exclusive access to the RAY pool on the AcceleRaytor program and get higher chances and bigger allocation for IDO projects on Raydium. For the first IDO project Media, we are setting the bar quite low for the RAY pool to attract more new users to come in and use the platform, but in the future, the team will be incorporating a new mechanism to accrual more value to RAY holders with the AcceleRaytor program.
We plan to let RAY holders participate in governance voting in the future so users will have a say on new features, project launches, and partnerships. We are also considering adding a buy and burn mechanism to reduce token supply in the future.
Question9: Raydium has launched an IDO platform called AcceleRaytor recently. Can you introduce it briefly to us? What will be the projects launching their token on AcceleRaytor?
AlphaRay: AcceleRaytor is a streamlined, end-to-end platform for projects to raise capital and drive initial liquidity on Solana. It allows the community to be able to join early rounds of investment in their favorite projects before they list on exchanges. Initially, there will be two types of pools available for each AcceleRaytor launch project — Community Pools and RAY Pools (exclusive to RAY stakers). This two-tiered approach is meant to provide the wider community open access to early-stage projects while also rewarding the support of the Raydium community.
The first AcceRaytor project is Media Network, which is scheduled to launch on April 29th. Media Network is a new protocol that bypasses traditional CDN providers’ centralized approach for a self-governed and open source solution where everyone can participate. Participants earn MEDIA rewards for their bandwidth contributions, a fixed supply SPL token minted on Solana’s Blockchain. Media will raise $1 million USDC with a fixed price of $10 on RAY Pool and Community Pool, and $500k USDC on IDO via AMM with a starting price of $10. For more details, please refer to our official Bihu article: https://bihu.com/article/1774806936
We also have a few projects lined up for the upcoming AcceleRaytor launch in May, so please stay tuned for our announcement!
Question 10: What other plans does Raydium have recently? Any new products being launched? Will you cooperate with the other projects within the Solana ecosystem?
AlphaRay: Our team has been very actively working with the entire Solana ecosystem and sourcing good quality projects to launch on AcceleRaytor and launch Fusion Pools on Raydium. We also plan to release permissionless pool features where users can make their own trading pairs and provide liquidity of those pairs without our permission.
We are also working on stable asset swaps so that users can participate in pools similar to Curve and have deep liquidity when trading stable coin pairs. After that, we will also be working on a borrow-lending protocol to provide leverage trade on Raydium.
