We have seen many Automated Market Maker (AMM) protocols spring up in recent times. However, most of them have been based on Ethereum or Binance Smart Chain (BSC). Now, we have an AMM protocol that is based on the Solana chain called Raydium. This protocol is also a liquidity provider for the Serum DEX. Its native crypto is called RAY. The RAY token holder can earn interest and take part in the governance of the protocol, although in a limited way.
The Raydium protocol does things differently from other AMMs in the sense that it offers on-chain liquidity to a central limit order book. What that means is that liquidity provided on the protocol is changed into limit orders on the Serum’s order books. So, apart from their current liquidity, liquidity providers also have access to the whole of Serum’s order flow.
|Circulating Supply||76,537,339.12 RAY|
|All Time High||$16.93|
|All Time Low||$1.57|
What Is Raydium (RAY) Cryptocurrency?
The Raydium protocol is a DEX built on the Solana blockchain. As mentioned earlier, Raydium is the largest AMM for Solana’s based exchange called Serum. Additionally, Raydium is an exchange on its own. This allows the protocol to offer the best of both platforms- Raydium and Serum. That is when you create an order on Raydium, it uses its liquidity pool to fulfill the order or re-route the order to Serum’s decentralized order book based on which offers the best price for the user. The fact that Raydium has access to both its own liquidity pool and that of Serum means that it can solve the issue of liquidity shortage and high slippage that occurs in huge transactions.
The RAY token is the native token of the Raydium protocol, and we will discuss it better as we progress in the article. As for the Raydium network, it has been able to offer cheaper and faster transactions by exploiting the lower gas fees found on Solana as well as its blockchain efficiency.
The Brains Behind Raydium Protocol
The innovative brains behind the protocol go by the token ticker RAY + another identifier. AlphaRay is the head and oversees the operations, business development, product direction, and overall strategy. He has experience in algorithmic trading of commodities before changing the environment to the liquidity provider and market maker.
The next member of the team is XRay who is the Development team leader and Chief of Tech. He has years of experience as an architect for low latency and trading systems in the crypto and traditional markets. He is in charge of all the design of the protocol’s infrastructure and systems.
We also have GammaRay who leads the communications and marketing department. A large part of his working experience was spent in market research and data analytics where he worked on corporate marketing and client engagements. In the world of crypto, he had been involved in discretionary trading and technical analysis
RAY Token’s Key Features
By banking on Serum, the Raydium protocol combines Order Books with automated market making. This enables the protocol to take advantage of Serum’s liquidity pool. So, Raydium offers users features that allow them to place a market order, limit order, among others.
The DEX is an AMM, which allows users to utilize its liquidity pool as it focuses on serving trading activities between assets that are traded less. Users can perform token swaps without depending on order books and at the same time pay lower transaction fees and gas fees.
Those that provide liquidity are eligible for rewards for providing liquidity. Users will be rewarded with RAY tokens for injecting liquidity into key pools. One of the recent features of Raydium includes permissionless pools that allow anybody to create tradable automated market maker pools.
You can do yield farming on Raydium where users inject liquidity into pools to generate RAY tokens as farming rewards.
You can also stake your RAY tokens to earn extra RAY tokens.
This is the Launchpad for new projects based on Solana looking to raise funds and inject liquidity.
The Raydium Ecosystem
The Raydium ecosystem is based on two central architectures. The first one is that it gives users access to order books on Serum. Secondly, the algorithm uses the constant function automated market maker, which will be discussed below.
Constant Function AMM
This algorithm is also called constant products because it utilizes a feature that makes sure that every asset in the reserve is kept constant irrespective of the trades done.
This function uses the formula K= Y* X.
X stands for the number of tokens in mining
Y stands for the liquidity reserve tokens
K is the constant product.
Raydium Backers and Strategic Partners
Raydium has been able to secure strategic partnerships with the likes of ChainSwap, a cross-chain asset bridge and app hub for smart chains. As well as a partnership with Wootrade, which is a layer one trading infrastructure. The most notable partnership is with Serum DEX, which has allowed the Raydium protocol to tap into its liquidity pool ecosystem.
The RAY Token
The RAY coin is the native token of the Raydium network and 555,000,000 of them were minted at the launch of its mainnet on February 21, 2021. The token distribution is as follows:
- 34% allocated as incentives for liquidity mining, which is to be released over 3 years.
- 30% reserved for expansion of the protocol and securing partnerships. This covers funds injected into projects modeled around the Raydium protocol or money to help build the Raydium communities. The RAY tokens are locked for a year before they are unlocked linearly over the next two years.
- 20% for the team in a 1 to 3-year lockup system.
- 8% for liquidity.
- 6% for community and seed funding.
- 2% for the advisors in a 1 to 3-year lockup system.
The RAY token has the following uses within the Raydium ecosystem:
To participate in governance– holding the RAY token gives holders the ability to take part in the decision-making process. As a token holder, you have voting rights, which allow you to vote on amendments and proposals concerning the protocol. The number of tokens you hold is equivalent to your token number.
Staking– RAY token holders can stake their tokens to receive protocol fees or IDO allocations. RAY token holders earn 0.03% of transaction fees when they stake their tokens.
Is the RAY Token a Good Investment?
According to Coinmarketcap, the current price of the RAY token is $11.88 with a market cap of $120,602,193 and a daily trading volume of $120,602,193 as of November 9, 2021. The coin is currently ranked at number 119 on Coinmarketcap and has a verified circulating supply of 75,514,034.39 RAY coins with a maximum supply of 555,000,000 RAY tokens.
According to Wallet Investor’s analysis, the RAY token is an outstanding investment. Going by the current price as of November 9, 2021, a $100 investment will likely get you 8.411 RAY coins. Going by their analysis, your $100 investment could be worth $293.84 in five years giving you an expected income of +193.84%.
As of current information, Wallet Investor indicates that indeed the RAY token is in a bullish market and the token is expected to have a positive trend in the future.
Wallet Investor’s Raydium price prediction 2021 indicates that the token will reach a maximum price of $17.479 by the end of December. By 2022, the Raydium price forecast shows that the token will reach as high as $22.010 at the end of the year.
According to Digital Coin Price, the prediction is almost similar to what we have above. The Raydium price prediction 2021 shows that the token will reach $18.18 while in 2022 the Raydium price forecast is $19.88.
Going by priceprediction.net analysis, the price prediction for the RAY token for 2021 is a maximum price of $12.89 at the end of 2021. While in 2022, the Raydium price prediction 2022 shows that the token will reach as high as $21.15.
Let’s look at the RAY coin price prediction 2026. Wallet Investor is predicting a maximum price of $39.458 by November 2026. Priceprediction.net RAY token forecast indicates that the token will reach a price of $103.77 by 2026. Digital Coin Price is predicting a price of $42.02 for the Raydium token in 2026.
By 2030, Priceprediction.net expects the RAY coin to be as high as $450.71. According to the Tech News Leader, the RAY token could reach an average price of $903.68 and go for as high as $1,080.83. That will be a significant gain in 2030 if that price is realized.
The Raydium protocol ambitious plan is key to developing the Solana network. It is one of the few projects on Solana that could fit in the category of Blue chip protocol key to the growth of the Solana chain. Technically, the hybrid approach of Raydium by combining liquidity pools and order books has shone the light on the project itself and the Solana ecosystem in general.
Perhaps the most interesting part of this alluring protocol is its AcceleRaytor function, which is the project’s ambitious approach in helping new projects expand on the Solana blockchain. For crypto projects raising funds is not as hard as gaining early grounds and users. Through Raydium, users can be led to the most worthy projects on Solana. This alone can help the Solana chain and Raydium ecosystem thrive for many years.
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