Serum and Solana are really starting to hit their stride. This year has been prolific for both ecosystems, to say the least. One application that has especially turned heads since its launch is Raydium — the established hybrid AMM solution which brings concentrated liquidity to Solana through the help of Serum’s central orderbook. Raydium demonstrates the synergistic power behind composability by showing how automated market makers can compose directly with Serum’s to neatly address the shortcomings of the traditional AMM model.
This week, we’re joined by AlphaRay, founder of Raydium. In this week’s installment, the Raydium team shares with us their vision, their advice for new teams, their most memorable experiences, and even some of the most exciting developments on their roadmap.
What’s up Next
1. — What is Raydium?
2. — The founding story
3. — Building from scratch
4. — Sharing liquidity with Serum
5. — Advice for new founders
6. — Product vision
7. — What makes it all worth it!
1. You’re one of the Serum ecosystem veterans, but for those who don’t know you, what is your 30 second elevator pitch for Raydium?
Is there anything different now compared to how you would have described Raydium when you launched?
Raydium is the on-ramp to the Solana ecosystem: we bridge great projects to an amazing community. To users, it’s where you go to swap, earn yields, and participate in the IDOs of your favourite projects. To projects, it’s a fundraising platform, market maker, and exchange all rolled into one package.
We didn’t launch with the full suite of products, but this is really how we imagined it to be. The difference between then and now is that at the beginning, we rushed out of the gates blazing and trying to make a name for ourselves. As we’ve grown, we’ve also matured and realized the trust our community has put in us, as well as the responsibility we have towards growing the greater Solana ecosystem.
2. The Raydium team has a ton of experience in high frequency trading across traditional and cryptocurrency markets.
What can you share about the story behind your founding and why did you choose to build in DeFi?
We’ve been traders for many years ourselves. We first got into DeFi in the late spring of 2020. We participated in tons of DeFi projects over the course of that summer by swapping, providing liquidity, borrowing and lending, yield farming, and participating in governance.
We loved it. The energy behind communities talking about governance proposals and projects making important financial tools available to everyone was mesmerizing. But the cracks started showing, and by September, Ethereum was unusable for the average person. Fees and wait times were through the roof, so we figured there had to be a better solution. We looked around the market and had a chat with the Serum team. They explained their vision for the future and we could just see the stars aligning as well as the need for Raydium.
3. The DeFi ecosystem on Solana has grown a lot in a short period of time and Raydium was one of the first applications to really capture the minds of the Solana ecosystem.
What were some of the challenges of ‘being first’ and how did you overcome them?
On day one of building, there were no projects on Solana aside from Serum, so there was very little existing codebase to reference. This gave us the opportunity to build from scratch and do things our way. Then, as we were building, we found that Solana was moving at a crazy pace. Things that were working yesterday stopped working today because of a new patch. Sometimes these were due to issues we pointed out and had just made workarounds for. The worst was a point where Solana was making 1–2 updates a week and we were struggling just to play catchup.
After launching, things kept moving quickly. Solana had built a good reputation, but there were so few projects in the ecosystem at that point that our pools list had almost no unique tokens in it compared to other platforms, and we feared losing the entire community over the long run because of the lack of a supporting ecosystem.
This set us off to create the first AcceleRaytor program. Not only would we create a launchpad, but we would also help advise projects and get them trading on both Serum and Raydium with enough liquidity for users to actually trade.
Our first AcceleRaytor project was a huge success. So many users participated that we basically ground Solana to a standstill, which made for another first — the first time Solana had seen such heavy traffic. The next month was spent by all our teams going on an RPC building frenzy with each side adding about 10x the number of RPCs they had set up so far.
4. Raydium was the first Automated Market Maker to share liquidity with Serum’s decentralised on chain orderbook. The opportunities this idea presents for DeFi really is a breakthrough for the industry as a whole.
Longer term, do you think this trend will continue and how do you think it might shape the future of financial markets?
First, we should dive into what it means to share liquidity with Serum. When users add tokens to Raydium’s liquidity pools, the AMM decomposes the K=X*Y equation and turns those tokens into limit orders which are placed on Serum’s orderbook for anybody on Serum to trade against.
On the flip side, when a user makes a swap, Raydium will look for the best price between the orderbook and our AMM assets then execute the trade which yields the best price for the user.
This model is one of our core innovations and has use cases across the entire ecosystem.
Our team has been approached by multiple CEXs to bring our liquidity and orderbook functionality to their exchanges. While there are some areas to be improved on, we believe that there will be centralized exchanges adopting this model, as it’s really a step further than the many grid trading bots they have set up so far.
5. As the ecosystem grows, we’re seeing this flywheel effect of teams reaching out to find out more about Serum and Solana.
What words of wisdom do you have for builders that are about to make that leap and what are some of the ways Raydium can support new projects?
Build it and build it quickly. Solana presents new challenges but also opens a lot of doors. Building from the ground up in a new ecosystem really gives you a chance to think about exactly what problem it is you want to tackle and how you think it should be done. The developer ecosystem is really tight, with everyone helping each other so you’ll never feel alone here. The community support is just amazing with people giving constant constructive feedback and appreciation for what you’re trying to help them with.
The Raydium team is always here to support any project that needs help. We help advise projects on developing, direction, tokenomics, and anything else that you might need. We also have a complete AcceleRaytor program to help with fundraising, marketing and trading across the entire ecosystem.
6. The community is excited to see what’s next for Raydium. Can you share any breadcrumbs on future developments for our readers?
To start with, stable swaps should be the next one out the gate. These are designed for high capital efficiency and low fees on tokens that have a strong correlation such as USDC-USDT, synthetic BTC-Wrapped BTC, etc.
After stableswaps, we expect to have the necessary pools for advanced order routing between pools. Want to trade USDT for COPE and can’t find a pair? Raydium will find the route between pools to get you the best price on that swap. These two features combined would not only save users tokens, but would also give new users coming from centralized USDT based exchanges a seamless trading experience on Raydium.
The Sushi partnership has also been in the works for a while now and is getting pretty close to completion. We’re just working on hashing out some final details for user experience and should be ready to launch that in the coming weeks. Governance is also an area that we’ve put a lot of time into. Some things we’ve been very careful of is how to avoid bad actors from misappropriating governance power and building a composable platform that other projects could use as well.
7. Would you like to share some of your positive or most favourite experiences so far as builders? What would you say makes it all ‘worth it’?
Comments like these. We set out on this mission to help people who couldn’t afford expensive gas fees and give them tools that the traditional financial world wouldn’t give them.
As a builder, everything really comes together when you see that you have solved a real world problem and that you’ve made positive impacts on peoples’ lives.
We hope you enjoyed the interview!
We would love to continue having these kinds of conversations with all the incredible teams building on Serum and sharing them with you. Just let us know who you want to read about next!