Understanding PumpSwap

The differences between Raydium and PumpSwap

Key Difference: Slippage Impact Distribution

Raydium and PumpSwap employ fundamentally different approaches to handling price slippage during trade execution, affecting which side of the transaction bears the risk of price movements.

Raydium Trading Model

Fixed Input: SOL amount remains constant

Variable Output: Token amount fluctuates with price changes

Order Structure: sol_amount + min_token_amount

Risk Distribution: Price increases during execution result in fewer tokens received, protecting SOL input but exposing token output to slippage

PumpSwap Trading Model

Fixed Output: Token amount remains constant

Variable Input: SOL amount fluctuates with price changes

Order Structure: max_sol_amount + token_amount

Risk Distribution: Price increases during execution require more SOL payment, protecting token output but exposing SOL input to slippage

Strategic Implications

Raydium favors traders who want to spend a precise SOL amount regardless of token quantity received, making it suitable for dollar-cost averaging strategies.

PumpSwap favors traders who want to acquire a specific token quantity regardless of SOL cost, making it suitable for precise position sizing.

The choice between platforms depends on whether traders prioritize input certainty (Raydium) or output certainty (PumpSwap) in their trading strategy.