How to Use the Raydium (RAY) Decentralized Exchange on Solana: A Beginner’s Guide

Raydium (RAY) is a decentralized exchange (DEX) and automated market maker (AMM) on the Solana blockchain, offering fast, low-cost trading and providing on-chain liquidity to OpenBook's central limit order book. In 2024, it gained significant traction as a leading Solana-based DEX, fueled by the memecoin craze and integration with Pump.fun.

Raydium (RAY) is a decentralized exchange (DEX) built on the Solana blockchain. It combines the speed and efficiency of Solana with the power of decentralized finance (DeFi). Raydium offers on-chain liquidity to OpenBook's central limit order book, enabling seamless trades across the Solana ecosystem.

Raydium TVL | Source: DefiLlama

Raydium experienced a massive rise in popularity in 2024. This growth was driven by its integration with Pump.fun, a Solana-based memecoin launchpad which launched in January 2024. The memecoin frenzy on Solana brought a wave of new users to the platform, eager to trade trending tokens. By mid-2024, Raydium saw a 200% increase in trading volume compared to the previous year. It became the go-to platform for memecoin enthusiasts, offering deep liquidity and low fees. The partnership with Pump.fun not only attracted traders but also increased Raydium's visibility within the broader crypto community.

Raydium’s total value locked (TVL) surged from under $130 million at the beginning of this year to over $2.2 billion as of writing, making it the largest DEX in the Solana ecosystem.

Unlike many DEXs, Raydium uses an automated market maker (AMM) model to power its liquidity pools. This approach supports fast transactions and low fees, making it ideal for traders and liquidity providers (LPs). With hundreds of trading pairs and growing support for DeFi tools, Raydium has become a key player in the Solana network.

You can trade directly on Raydium or provide liquidity to its pools. When you add liquidity, you earn a share of the trading fees. These fees are distributed based on your contribution to the pool.

Raydium stands out by providing on-chain liquidity to OpenBook's central limit order book. This means trades made on Raydium can interact with other decentralized exchanges on Solana. You get access to a wider range of liquidity and better pricing for your trades.

The platform processes transactions in seconds, thanks to Solana’s high-speed blockchain. Transaction fees are incredibly low, often less than $0.01 per trade. This makes Raydium ideal for frequent traders and those dealing with small amounts.

Raydium also supports advanced trading features like limit orders and yield farming. Limit orders let you set specific prices for buying or selling tokens. Yield farming allows you to earn rewards by staking your liquidity provider (LP) tokens.

With its user-friendly interface and seamless wallet integration, Raydium makes decentralized trading simple and efficient. Whether you're a beginner or an experienced trader, you can use Raydium to trade or earn rewards securely.

What Can You Do on Raydium DEX?

Raydium offers several features that let you trade, earn, and interact with the Solana DeFi ecosystem. Here’s what you can do:

Swap Tokens: You can swap one cryptocurrency for another instantly. Raydium uses its liquidity pools to provide fast and low-cost transactions. Fees are minimal, often less than $0.01 per trade, making it ideal for frequent traders.
Provide Liquidity: Add tokens to liquidity pools and earn a share of the trading fees. Your rewards depend on the size of your contribution to the pool. For example, in 2024, Raydium's TVL exceeded $350 million, offering plenty of liquidity options.
Trade Using Limit Orders: Use limit orders to set specific prices for buying or selling tokens. This feature gives you more control over your trades compared to standard swaps.
Yield Farming: Stake your liquidity provider (LP) tokens in farms to earn additional rewards. Raydium's yield farming pools often provide competitive annual percentage yields (APY), making it a popular choice for passive income.
Participate in Launchpad Projects: Join Raydium’s AcceleRaytor to access new token launches. You can invest in promising projects before they hit the broader market. This feature is popular among users looking for early-stage investment opportunities.
Stake RAY Tokens: Stake your RAY tokens to earn rewards or participate in governance. Staking also helps secure the platform and incentivizes long-term holding.
Explore Memecoins: Raydium is a hub for trading trending memecoins, especially on Solana. In 2024, its integration with Pump.fun boosted its popularity as the go-to platform for memecoin enthusiasts.

Raydium combines advanced tools with an easy-to-use interface. Whether you’re trading, earning rewards, or exploring new tokens, you’ll find everything you need in one place.

Getting started with Raydium DEX is easy. You’ll need a Solana-compatible wallet, such as Phantom, and some SOL tokens to cover transaction fees. Here’s a simple guide to begin your journey on Raydium.

What Is Phantom Wallet?

Phantom is a popular, user-friendly wallet for the Solana blockchain. It allows you to store SOL and other Solana-based tokens securely. You can also use it to connect with decentralized applications (dApps) like Raydium.

Phantom offers a smooth interface and fast setup, making it an excellent choice for beginners and advanced users alike. As of 2024, it has millions of active users and is the most widely used Solana wallet.

Follow our easy step-by-step tutorial on how you can connect your Phantom wallet with the Raydium DEX interface:

1. Install the Phantom Wallet Extension

Visit the official Phantom Wallet website and download the extension for your browser. It supports Chrome, Firefox, and Edge.

2. Set Up Your Wallet

After installing, open Phantom and choose “Create New Wallet” if you’re a new user. Save your recovery phrase securely. If you already have a wallet, select “Import Wallet” and enter your recovery phrase.

Here’s an in-depth guide on how to create a Phantom wallet if you are a new user.

3. Fund Your Wallet

Transfer SOL tokens to your Phantom wallet. You’ll need SOL to cover transaction fees on Raydium. You can buy Solana on KuCoin and transfer the tokens to your wallet.

4. Access the Raydium Website and Connect Your Wallet

Go to the official Raydium website and click on "Connect Wallet" in the top-right corner of the Raydium app. Select “Phantom” from the list of supported wallets.

6. Approve the Connection

A popup will appear in Phantom. Review the details and approve the connection. Your wallet is now linked to Raydium.

Once connected, you can start trading, adding liquidity, or exploring other features on Raydium. Make sure to keep your wallet and recovery phrase secure for safe trading.

Swapping on Raydium is fast, with transactions completed in seconds. These low-cost, efficient trades make Raydium a top choice for decentralized token swaps. Follow these steps to trade efficiently and securely.

Before you start swapping:

Ensure your Phantom Wallet is connected to Raydium.
Fund your wallet with enough SOL to cover transaction fees. Typically, fees are less than $0.01 per trade.

Here are the steps to follow when you wish to swap tokens on Raydium after connecting your Phantom wallet:

1. Open the Swap Tab

Log into Raydium and navigate to the "Swap" tab in the app.

2. Select Your Tokens

Choose the token you want to swap from the first dropdown menu. Then, select the token you wish to receive from the second dropdown.

3. Enter the Amount

Input the amount of the token you wish to swap. Raydium will automatically display the estimated amount of the token you’ll receive.

4. Review Transaction Details

Check the transaction details, including:

Slippage Tolerance: This sets the maximum price change you’ll accept for the swap.
Price Impact: Shows how your trade affects the market price.

5. Confirm the Swap

Click "Swap" and review the summary. Approve the transaction in your Phantom Wallet popup.

Tips for Successful Swaps

Monitor Fees: Always ensure you have enough SOL in your wallet for transaction fees. Running out of SOL could delay your trades.
Adjust Slippage Tolerance: Keep slippage low for stable tokens and higher for volatile tokens. Default settings usually work well for most trades.
Double-Check Token Details: Confirm you’ve selected the correct tokens and amounts before approving.

In 2024, Pump.fun memecoins attracted thousands of traders, driving significant trading volume on Raydium. Follow this guide to start trading Pump.fun’s memecoins on Raydium.

Step 1: Connect Your Wallet

Use a Solana-compatible wallet like Phantom.
Ensure your wallet is funded with SOL to cover transaction fees.
Connect your wallet to Raydium by clicking "Connect Wallet" on the app.

Step 2: Access the Swap Tab

Once connected, go to the "Swap" tab on Raydium.
You’ll find a dropdown menu to select your tokens.

Step 3: Choose the Memecoin Pair

From the dropdown, select the Pump.fun memecoin you want to trade, such as $GOAT, $PNUT, or $CHILLGUY.
Choose the token you want to trade with, like SOL or USDC.

Step 4: Enter the Amount

Input the amount of the token you want to swap.
Raydium will calculate the estimated amount of the memecoin you’ll receive.

Step 5: Review and Confirm

Check transaction details, including slippage tolerance and price impact.
Click "Swap" and approve the transaction in your wallet popup.

Step 6: Monitor Your Tokens

After the trade, the memecoins will appear in your wallet.
Use the “Tokens” tab in Phantom to view your holdings.

Tips for Trading Pump.fun Memecoins

Stay Updated on Trends: Pump.fun memecoins are highly volatile. Follow the latest market news to make informed decisions.
Check Liquidity: Popular memecoins often have high liquidity on Raydium. This ensures smooth trades and minimal price impact.
Be Cautious with Slippage: Memecoins can experience rapid price movements. Adjust your slippage tolerance accordingly to avoid failed transactions.

Staking RAY tokens on Raydium is a great way to earn passive rewards. The process is simple and can help you maximize your holdings.

Benefits of Staking RAY

Earn staking rewards in RAY tokens, with competitive APYs.
Contribute to the security and growth of the Raydium ecosystem.
Enjoy the potential of compound earnings by reinvesting rewards.

Follow our step-by-step guide and stake $RAY on Raydium exchange conveniently:

1. Connect Your Wallet

Use a compatible wallet like Phantom or Solflare.
Ensure your wallet is funded with RAY tokens and some SOL for transaction fees.

2. Navigate to the Staking Page

Visit Raydium’s official website and click on “Launch App.”
From the menu, select the "Staking" or "Pools" section.

3. Choose the RAY Staking Pool

Look for the RAY staking option in the list of available pools.
Click on it to open the staking interface.

4. Enter the Amount to Stake

Decide how many RAY tokens you want to stake.
Ensure you leave a small amount of RAY or SOL in your wallet to cover any additional transactions.

5. Approve the Transaction

Confirm your staking request and approve the transaction in your wallet.
Once confirmed, your tokens will be staked, and you’ll start earning rewards.

MetaMask is one of the most popular wallets for Ethereum and EVM-compatible blockchains. However, it does not natively support Solana-based platforms like Raydium. Solana uses its own blockchain architecture, which is not directly compatible with MetaMask.

That said, you can connect MetaMask to Raydium indirectly using MetaMask Snap. MetaMask Snap is an extension that allows MetaMask to interact with non-EVM blockchains like Solana. To use it:

Install the MetaMask Snap extension from a trusted source.
Configure the Snap to include Solana as an available network.
Connect MetaMask to Raydium using Snap’s Solana integration.

While this is a developing feature, it can bridge the gap for users familiar with MetaMask.

Here’s a guide on how to connect MetaMask to Solana network.

MetaMask Alternatives for Engaging with the Solana Ecosystem

If MetaMask doesn’t suit your needs, you can bridge assets from Ethereum to Solana using tools like Wormhole. Wormhole allows you to transfer tokens across blockchains, enabling you to bring assets like USDC or ETH into Solana's ecosystem.

For the best experience, consider using Solana-native wallets like Phantom or Solflare. These wallets are specifically designed for Solana, ensuring smooth transactions and compatibility with Raydium. Both wallets support trading, staking, and interacting with Solana dApps seamlessly.

By choosing a Solana-compatible wallet, you’ll avoid technical issues and enjoy Raydium’s full functionality. MetaMask remains a valuable tool for Ethereum, but for Solana-based trading, native wallets are the smarter choice.

Raydium is a key player in the DeFi ecosystem on Solana, offering fast, low-cost trading, deep liquidity, and advanced tools for both beginners and experienced traders. Its growth in 2024, fueled by the memecoin frenzy and integration with Pump.fun, highlights its importance as a hub for decentralized trading.

Whether you want to swap tokens, earn rewards, or explore yield farming, Raydium provides a user-friendly and efficient platform. By connecting a compatible wallet like Phantom, you can access its full range of features.

However, always remember that DeFi platforms come with risks. Token prices can be volatile, and smart contract vulnerabilities may pose security concerns. Trade responsibly, do thorough research, and only invest what you can afford to lose.