Raydium is a DeFi protocol on the Solana blockchain. Raydium functions as an Automated Market Maker, a type of decentralized exchange (DEX) protocol that relies on mathematical formulas to set the price of assets. Instead of using an order book like traditional exchanges, AMMs use liquidity pools where users can swap tokens.
Raydium is closely integrated with Serum, another DEX on the Solana blockchain. This integration allows Raydium to offer faster and more efficient trades, leveraging Serum’s order book to facilitate liquidity and matching orders.
Being built on Solana, Raydium benefits from the blockchain’s high throughput and low transaction costs. Solana can handle thousands of transactions per second, with fees that are just a fraction of a cent, making it an attractive platform for DeFi applications.
Users can provide liquidity to various pools on Raydium and earn fees from the trades in those pools. Additionally, Raydium offers yield farming opportunities where users can stake their tokens to earn RAY, the platform's native token.
The RAY token is the native cryptocurrency of the Raydium platform. It's used for governance, staking, and earning a portion of the trading fees. Holding RAY tokens can give users a say in the platform's future development.
