What is Raydium (RAY)? AMM platform on Solana

Bittime - Raydium (RAY) emerged as one of the innovations that attracted the attention of crypto enthusiasts. Carrying the Automated Market Maker (AMM) concept on top of the Solana blockchain, Raydium offers a fast, liquid and low-cost digital asset trading solution. 

This article will take a deeper look at what Raydium is, how it works, history, and the role of the RAY token in this ecosystem. Keep watching, OK!

What is Raydium (RAY)?

Raydium is an Automated Market Maker (AMM) built on the Solana blockchain. As an AMM, Raydium allows digital assets such as crypto assets to be traded without permission through the use of liquidity pools. 

These liquidity pools rely on individuals known as liquidity providers, who lock their assets in liquidity pool smart contracts. These locked assets are then used as trading pairs in certain markets for traders on decentralized exchanges.

How Does Raydium (RAY) Work?

Raydium combines the flexibility of AMM with the traditional order book mechanism of decentralized exchange Serum. Users who provide liquidity on Raydium are incentivized with rewards in the form of RAY tokens. 

RAY is the utility token of the Raydium ecosystem. These tokens can be staked on the platform to earn additional crypto.

Liquidity Pools (LP)

With the emergence of blockchain and DeFi technology, new trading methods using AMMs and liquidity pools are becoming popular. Through AMMs such as Raydium, users buy and sell assets against asset pools provided by liquidity providers. 

The assets in this liquidity pool function as the opposite side of the transaction, where buy and sell orders are executed.

Raydium utilizes the Solana blockchain to overcome the problem of high gas fees. Additionally, there are also slow execution times, lack of limit orders, and insufficient liquidity on the AMM platform on Ethereum. 

In addition to the exchange's core features, Raydium also offers "dual reward farming" which allows liquidity providers to earn additional yield on their LP tokens. Users can also stake RAY tokens to earn additional rewards collected from the platform's trading fees.

History of Raydium (RAY)

Raydium's core development team uses a series of pseudonyms. AlphaRay carries out the strategy and business development of this project, with a background in algorithmic trading in commodities. 

XRay is Raydium's chief technology officer. They join GammaRay, StingRay, and RayZor who contribute to marketing, commerce, and computer security initiatives. 

The team first got involved in DeFi in the spring of 2020 and began planning a new DeFi solution by writing code and exploring various partnership opportunities until finally collaborating with Serum. Raydium mainnet launched in February 2021.

What Are RAY Tokens?

The RAY token is Raydium's native asset that serves various functions within the protocol. Users can earn RAY through contributions to liquidity pools and staking, which unlocks additional rewards. 

This token also functions as a governance token, authorizing ecosystem participants to contribute to the management of the platform.

Tokenomics Token RAY

RAY is currently Solana's most distributed governance token with approximately 160,000 holders on-chain. RAY is listed on more than 20 exchanges and daily trading volume is over $30 million. RAY tokens have a total supply of 555 million tokens. The token distribution is as follows:

- Mining Reserve: 34% – 188.700.000 RAY

- Partnership and Ecosystem: 30% – 166.500.000 RAY

- Team (1-3 Years lock-in) 20% – 111,000,000 RAY

- 8% Liquidity – 44,000,000 RAY

- Community & Seed 6% - 33,300,000

- Advisor (1-3 Year lock-in) 2% - 11,000,000 RAY

12% of taker fees in Raydium are allocated for RAY buybacks and held in a wallet controlled by the DAO.

Conclusion

Raydium has changed the face of decentralized finance on Solana since its launch in February 2021. Raydium's success lies in its innovative token swap mechanism, powerful yield farming, and RAY token integration, which fosters a comprehensive and inclusive ecosystem. 

The wide distribution of RAY tokens shows a commitment to a decentralized future. 

That is a review of what Raydium (RAY) is. Hopefully this article can increase your knowledge about crypto, yes!

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To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also ensure you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Study Complete Guide How to Buy Crypto on Bittime. 

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