Raydium vs. Serum

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Elena

26/02/2023
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Despite the birth of thousands of different cryptocurrencies in the wake of the creation of Bitcoin, there are a few creators that stand above the others in the field. In the last year alone, there has been significant buzz around a certain kind of coin.

These Sam coins, as they are known, are tied to a number of potentially interesting projects like Serum and Raydium. But when it comes to Raydium vs. Serum, what is the difference?

Sam Coins Crypto

The Sam coins are the brainchild of Sam Bankman-Fried. He is the founder of the derivatives exchange FTX as well as a quant-trading firm known as Alameda Research. Bankman-Fried has also extended his name in the cryptocurrency space through the introduction of a number of different projects and tokens. These are referred to as “Sam coins.”

These coins are known as FTT (which is the native token of his FTX trading platform), Raydium, and Serum. Knowing the difference between them can be important, given they all come from the same mind.

Serum (SRM)

What is interesting about Serum is that it is not only a token but also an exchange and ecosystem rolled into one package. It is built on the Solana blockchain, with the primary focus of providing users with a stable, scalable, and fast platform. Even better, since it is a decentralized exchange, it is also completely permissionless.

Perhaps the biggest difference between Serum and some of the other decentralized exchanges that have since been built on Ethereum is that it has on-chain order books. Most of those based in Ethereum’s DEX use liquidity pools for the back-end infrastructure for those users to trade against.

This is great for providing liquidity for trading, but it can harm liquidity providers who are taking the risk and those impermanent losses that come due to price fluctuations. With the decentralization of order books, Serum brings all of those centralized exchange features into a totally decentralized environment.

Those who have used a DEX know that they can be quite expensive to use. Each of the transactions requires what is known as a gas fee that is paid out to the “miners” to record the trade on that public blockchain.

When it comes to platforms like Ethereum, those fees can be upwards of $40 for a single trade. For the average investor, this makes the DEX basically unusable. For that reason, Solana became the platform of choice on which Serum would be built.

It operates at a quick-twitch 400ms, which makes it both efficient and scalable. Because of that, the transaction costs are near zero, coming to roughly $0.00001, which makes the bar of entry clearable for every investor.

Raydium

This is where we learn the difference between Raydium vs. Serum. Raydium is also based on the Solana DEX, operating as an Automated Market Maker but with a twist. The more traditional AMM’s out there will only support trading within their own liquidity pools. With Raydium, that is not the case.

This DEX is AMM-based and is built on top of Serum, which incorporates its on-chain order book at the very core of the protocol. Because of this, Raydium LP’s are not only providing on-chain liquidity directly to the limit order book within the Serum DX, but also exposing Ray LP’s to the liquidity that is offered through the entire Serum ecosystem.

What does that all mean? Well, it means that Raydium users get all of the benefits that come from Serum and then some. This includes farming rewards and collecting trading fees as well.

FTT

A part of the trio of Bankman-Fried offerings is FTT, which has become the token of choice for centralized trading within this format. It has been described as the backbone of the FTX ecosystem, incorporating incentive schemes to maintain an ever-growing demand.

This model includes things like fee rebates for trades makers, fee discounts for FTT holders, token staking, and even buybacks/burns, which are the most powerful.

Also, it is worth noting that a third of all the fees generated through the FTX markets go towards purchasing FTT from the open market, permanently removing it from circulation. This makes FTT deflationary.

Those buybacks happen on a weekly basis, with all of the purchases posted directly to the FTX website. This is important to note because more than 10 million tokens, estimated to be worth $400 million, have been destroyed forever, with about 10% of the total tokens having been burned.

The Rise of Sam Coins

These Sam coins have been both ambitious and successful as well. It helps that they all had the backing of a revered name within the cryptocurrency space like Bankman-Fried. Because of his history and the types of projects that he has brought forth, it has become difficult not to root for him.

He has done well in identifying the potential opportunities within the Asian markets, building an empire that many feel comprises nearly of 10% of all cryptocurrency trading at any time. The size of the trading isn’t what is admirable; it is his donation to nonprofits and charities that are earning him so much favor.

With that kind of backing, it is easy to see why there has been such success with coins like Raydium and Serum. What the future holds is uncertain, but a name like Bankman-Fried has managed to carve out a substantial niche in a highly-competitive world.

Conclusion

Time will tell what kind of successes are in store for these Sam coins. Given the reputation that Bankman-Fried holds, it is hard to imagine a world where he isn’t behind more than one successful endeavor.

For now, those who are supporting Sam coins are there for the ride. The world of cryptocurrency is one that is quite volatile on a good day. Finding some level of certainty goes a long way in that kind of space.

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