Raydium is an automated market maker (AMM) decentralized exchange (DEX) on Solana that offers a decentralized exchange where users can swap tokens that trade on Raydium through its permissionless liquidity pools. Pools can follow the standard AMM model or the concentrated liquidity market maker (CLMM) model.

The CLMM model enables increased capital efficiency by allowing liquidity to be concentrated at certain price ranges. Traders experience lower slippage due to liquidity being concentrated around the live price point. Liquidity providers (LPs) earn increased fees when the liquidity provided is concentrated at the price range in which all trades are occurring. However, this comes with an increased risk of impermanent loss for LPs since position weights change more quickly due to liquidity being provided on a tighter price range rather than on the entire price curve. Notably, Raydium provides order flow and shares liquidity with OpenBook’s onchain central limit order book (CLOB).

Raydium also hosts a Solana launchpad named AcceleRaytor that allows users to participate in token sales. An AcceleRaytor Application can be found here.