What is Raydium（RAY）? Crypto Liquidity Platform with Central Order Books

What is Raydium (RAY)? Solana-based AMM project which serves as a DeFi platform for Solana, functioning in cooperation to Solana’s main Decentralized Exchange (DEX) called Serum. Expands the features based on Serum’s asset swaps by providing a range of more advancedtrading tools.

Main advantages of Raydium: What makes Raydium stand out from other AMM’s is the existence of a central order book, while other crypto automated market makers can only access the liquidity from the particular assets they’re trading. Raydium users can also access TradingView features through the platform to operate trades under advanced trading tools. Transactions on Raydium are very fast and cheap - much more than DEXs built on Ethereum.

AcceleRaytor: AcceleRaytor is a launchpad for new Solana projects - whether they have already been launched or are pending released. An Initial Coin Offering (ICO) platform, projects on AcceleRaytor are completely new to the crypto ecosystem, and therefore need to raise capital to not only further develop the crypto but create liquidity around it. AcceleRaytor therefore provides a platform for these projects.

The Ray Token:

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The token distribution goes as follows, totaling 555 million RAY tokens:

• Mining Reserve, 34% - 188,700,000
• 
  
• Partnership & Ecosystem, 30% - 166,500,000
• 
  
• Team (1 - 3 Year Lockup), 20% - 111,000,000
• 
  
• Liquidity, 8% - 44,400,000
• 
  
• Community & Seed funding (1 Year Lockup), 6% - 33,300,000
• 
  
• Advisors (1 - 3 Year Lockup), 2% - 11,000,000

Over the past year and a half, Solana (SOL) has quickly become one of the main crypto projects in the world. Once reaching the number 4 position on the global crypto rank, the Layer-1 blockchain promises fast and cheap transactions under an allegedly scalable ecosystem with easy integration for developers.

Since its conception, Solana has brought countless new projects and utilities onto its network. Resembling Ethereum itself, it already accounts for metaverse, gamefi, NFT and DeFi projects. Like Ethereum itself, it holds a core group of projects that act as the main access points for the ecosystem - one of them being Raydium (RAY).

In this article, we provide a summary of what Raydium is, the functions behind the RAY token and what makes this such a relevant project for Solana.

What is Raydium (RAY)?

Raydium is a Solana-based Automated Market Maker (AMM) project which serves as a DeFi platform for Solana, functioning in cooperation to Solana’s main Decentralized Exchange (DEX) called Serum. The main purpose behind Raydium was to expand the features based on Serum’s asset swaps by providing a range of more advanced tools that are usually only available through traditional exchanges - but focused on the Solana ecosystem.

Through Raydium, users are able to execute advanced trading options, NFT staking and trades, liquidity pools, automated market makers, yield farming and the usual crypto asset staking. Raydium also has its own Initial Coin Offering (ICO) platforms; AcceleRaytor and High-Liquidity Launches (more on them later).

The project was founded in February 2021 with the issuance of a few tokens under the total limited supply of 555 million RAYs. Like many crypto projects, Raydium is completely anonymous. It got its name from unknown developer Alpha Ray, followed by its current Chief Technology Officer XRay and Head of Comms GammaRay. Despite its anonymity, Raydium is not entirely decentralized; although there is some open-sourced code to build upon, the smart contracts in Raydium can only be applied and accepted by the official administrators.
Under a current market cap of $134 million dollars at the time of writing, Raydium has a Total Value Locked (TVL) of $373 million dollars in crypto assets in the platform - almost three times its value in market cap.

Main Advantages of Raydium

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The main structure of Raydium is as an automated market maker built on Solana, where users can provide assets and liquidity to several different services on the platform - the previously mentioned Total Value Locked is where such liquidity comes from, allowing Raydium traders can access different tools to operate on a decentralized, non-KYC manner.

What makes Raydium stand out from other AMM’s is the existence of a central order book, while other crypto automated market makers can only access the liquidity from the particular assets they’re trading. An example would be if you’re trading a very small cap asset that consequently doesn’t have that much liquidity on any platform. Trading it on other DEXs would be very difficult, given that there’s not enough liquidity for that particular crypto since there aren’t that many investors. Therefore, you’d potentially be stuck with those assets until there’s enough interest around it for trades and liquidity to flow. With Raydium, liquidity can be accessed on-chain throughout the entire ecosystem regardless of asset or liquidity pool.

On top of that, Raydium users can access TradingView features through the platform to operate trades under advanced trading tools such as limit orders - it might sound simple for the average trader, but to have limit orders on a decentralized platform is an extremely complex feat.
Since it's built on the Solana blockchain, transactions on Raydium are very fast and cheap - much more than DEXs built on Ethereum, for instance (although not as future-proof yet).

AcceleRaytor

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Called by official documents “an initiative by Raydium to spearhead the growth of the Solana Ecosystem”, AcceleRaytor is a launchpad for new projects - whether they have already been launched or are pending released. Projects on AcceleRaytor are completely new to the crypto ecosystem, and therefore need to raise capital to not only further develop the crypto but create liquidity around it. AcceleRaytor provides a platform for these projects to become known and for Raydium users to have early access to these initiatives by investing in a seamless manner.

Raydium also motivates projects to include their cap raise in the platform, where each new crypto can specify the price per token upon Initial Coin Offering and the raise size - meaning how many tokens will be available for Raydium to distribute.

The RAY Token

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Currently at 106 million RAY tokens emitted, RAY has a total supply cap of 555 million tokens. It has one of the biggest mining reserves in crypto, which will account for 34% of total tokens. Released in February 2021, token emissions will occur daily until approximately February 2024 with halving occurring every six months - a process where mining power per token doubles so fewer tokens are mined per period.
Also, 0.03% of all trading fees are rewarded to RAY stakers - those that have staked RAY tokens in pools of the platform.


The token distribution goes as follows:

• Mining Reserve, 34% - 188,700,000
• 
  
• Partnership & Ecosystem, 30% - 166,500,000
• 
  
• Team (1 - 3 Year Lockup), 20% - 111,000,000
• 
  
• Liquidity, 8% - 44,400,000
• 
  
• Community & Seed funding (1 Year Lockup), 6% - 33,300,000
• 
  
• Advisors (1 - 3 Year Lockup), 2% - 11,000,000

The reason for a lockup period for tokens related to the team, initial funding and advisors is so team members such as developers and advisors don’t see the token rewards as s short-term project, but rather engage in its development on a long-term basis to see it flourish and grow - a strategy commonly utilized also in traditional companies that have a stock-distribution system for employees.



Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
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