Raydium (RAY) is a DeFi platform built on Solana and DEX Serum, with the purpose of expanding the decentralized trading capabilities that Serum offers, and at the same time, offering new products to its users, which are empowered by the native token. RAY.
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Raydium is a project by decentralized finance (DeFi) that has its space within the ecosystem Left (LEFT) and that it is closely linked to the DEX Serum that runs on this network.
The intention behind the development of Raydium is to allow its users to carry out exchanges through Serum as an asset exchange but, at the same time, expand Serum's capabilities through advanced trading functions such as limit orders, trades with NFT, farming y staking. All this integrated into the same interface. Additionally, Raydium offers the RAY token, which offers negotiation advantages to its holders when they carry out operations in its protocol, thus encouraging the use of it and its different services.
Thanks to all this, Raydium has become one of the most widely used DeFi protocols within the Solana ecosystem, and its growth has continued to increase thanks to its interesting proposals and services provided.
Origin of Raydium
Raydium is a fairly recent development in the world of decentralized finance. Its launch took place in February 2021, when 555 million RAY tokens were issued. Behind this launch was Alpha Ray, a well-known developer with great experience in the field of algorithmic trading and liquidity provision, activities that he has been carrying out since 2017. Alpha Ray, is a pseudonym, since its real identity is unknown, and the same happens with the rest of developers.
In 2020, Alpha Ray started developing an AMM product for the Solana network, and in order to facilitate the development work, it decided to make use of the existing Serum structure to expand it with new services and products: it was the birth of Raydium. In this effort, two more members who are known as:
- XRay, who is the chief technology officer and leader of the Raydium development team.
- GammaRay, who is the head of marketing and communications.
Collectively, it was they who designed and created Raydium, and who have watched over its evolution thus far. However, the fact that the creators of Raydium is anyone's guess, adds to a somewhat strange fact within the crypto community: Raydium is a proprietary code development. All smart contract programming and others in Raydium is completely closed, leaving only some tools in open-source mode that can be reviewed in the project's official software repository. The situation has caught the attention of many developers within Solana and they expect this to change as the project evolves.
How does Raydium work?
Raydium is a DEX of the AMM type, where users become liquidity providers thanks to the different staking pools that can be generated within Serum. In that sense, Raydium's operation is very similar to what we see in 1inch, where other DEX platforms are used to obtain liquidity and serve as a basis for the operations carried out.
On the other hand, Raydium works on the Solana network, a high-speed network that has become a benchmark for third-generation blockchains, thanks to its extreme speed and enormous scalability. Because Raydium works on Solana, this protocol can benefit from the following advantages:
- It is fast and cheap, since the operations in Solana have an average time of 5 seconds and a cost of a few cents per transaction.
- It is a centralized order book for liquidity across the ecosystem. This is possible because Raydium is integrated into Serum's liquidity, allowing you to have access to the order flow and liquidity of that entire ecosystem. Serum is Solana's largest DEX, so the available liquidity is huge.
Services within Raydium
Raydium comprises a large number of services among which we find:
Exchange
The first service that we can see within Raydium is an exchange interface that is thought to be very easy to use. In it we can see an interface that allows us to change the token in our possession for some of the options that Raydium offers us. At this point you should bear in mind that the main tokens are those found in the Solana network, but we can also find “wrapped” tokens from other networks such as wUSDC (equivalent to USDC from ERC-20 from Ethereum), wETH (ETH equivalent) or wUSDT (Ethereum ERC-20 USDT equivalent).
To connect in any case to Raydium, you must consider using a wallet compatible with this network. A good option in this case is to use Phantom or hardware wallets such as Ledger or Safepal, which support this network.
Liquidity Pools
Another option within Raydium is to provide liquidity for the different pools that Raydium has access to within Serum. The interface allows you to choose any pair of tokens available on the platform and inject the liquidity you want into the system.
This system makes you a supplier in exchange for obtaining interest for each transaction you carry out within the pool in which you participate. Interest may vary depending on the pool, and can be reviewed in detail in the following link. Thus, you can decide which pool suits you best within the system and join the one that suits you best.
Farms
Another service within Raydium is the Farms or Farms, which allow you to inject liquidity in order to exploit yield farming strategies. The system is similar to that of liquidity pools with the exception that they will generate a return that will be expressed in rewards through the RAY token.
Staking
Another product within Raydium is staking for which you receive rewards in the form of RAY tokens. The rewards can vary greatly depending on the market, but the annual interest rate is usually around 20%. The good thing about this system is that you can use it as an additional option. For example, it is possible to participate in liquidity pool and staking, so the rewards you receive in RAY can be used in staking and make the most of it.
AcceleRaytor
AcceleRaytor is an initiative by Raydium to lead the growth of the Solana ecosystem. It serves as a launch pad for the latest projects to raise capital and drive initial liquidity in a decentralized and interoperable way. In this case, AcceleRaytor looks a lot like PancakeSwap's IFOs, only they are much more open and accessible. This allows the community to participate in carefully selected and vetted token offerings.
RAY token, Raydium's native token
The native token of the Raydium platform is RAY, an SPL-type token that works on Solana and has the following characteristics:
- A total issuance of 555 million RAY tokens.
- It has a reserve consisting of 34% of all tokens, or 188,7 million RAY. This reservation serves to respond in case of any negative situation that may affect the protocol.
- RAY token issuances are scheduled to run over 36 months. In addition, RAY is issued with a halving system that reduces the number of RAY tokens issued every 6 months.
- Being an AMM-type DEX, each operation generates interest, of which 0,03% is directed to the RAY token stakers.
On the other hand, the RAY token allows its holders to generate interests and intervene (albeit in a limited way) in the governance of the protocol. Likewise, RAY also allows you to participate and vote on the proposals and modifications of your community. RAY token holders can vote on the issues presented to the community. The amount of RAY that a user has determines the voting power that they have.
Conclusions
Raydium is an interesting product for those who live within the Solana network. It allows the user of the platform to operate with ease and offers unique services such as the staking system, yield farming, AcceleRaytor and NFT management, all in one place. In addition, throughout its history it has had a user experience and security that few services can achieve, which makes it stand out as a high-level DeFi platform.
In addition, the fact of being based on Solana and allowing the operation with other chains (such as Ethereum) also provides a plus for those looking to perform operations much faster and cheaper. In any case, Raydium stands out as a very complete and powerful option, which continues to improve and which, surely, will stand out for the avant-garde of the services it offers.
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