MSTR Cat

Blockchain/Level VIII · The memecoin age/8.2 Solana/Lesson 3

DEXes and aggregators: Raydium and Jupiter

Order books, constant product curves, and the router that finds the best price among them

MaterialsThe Jupiter web interface (quotes only; no wallet needed)A Solana block explorer (e.g., Solscan)

Wonder

  1. How does a mathematical formula replace an order book to determine a token’s price?
  2. Why did the collapse of FTX force a community fork of Solana’s primary order book protocol?
  3. What is the mechanical difference between an aggregator that routes trades and one that holds liquidity?

Explore

  1. Raydium launched in 2021 as an automated market maker (AMM) that also placed its pool liquidity on the Serum order book. Unlike centralized exchanges that match buy and sell orders on a central limit order book, Raydium uses constant product formulas. Liquidity providers deposit pairs of tokens into smart contract pools; the price is derived from the ratio of reserves within those pools. This design allows for instant execution without waiting for an opposing party to post a matching order, trading potential price efficiency for immediate availability.
  2. Serum began as Solana’s dominant on-chain order book, but its architecture contained a critical vulnerability: FTX controlled the upgrade key. When FTX collapsed in November 2022, the original Serum deployment could no longer be trusted. The protocol’s source code was open, so developers forked it into OpenBook. This event highlighted the risks of centralized authority within decentralized systems; even if the trading logic is open-source, a single entity holding administrative keys can freeze or alter the entire market infrastructure.
  3. Orca and Meteora address liquidity efficiency through different pool structures. Orca offers concentrated-liquidity pools, allowing providers to allocate capital within specific price ranges rather than across all possible prices. This increases capital efficiency but requires active management. Meteora’s DLMM pools concentrate liquidity in price bins and raise fees when volatility rises. These variations compete with Raydium’s standard AMM models, creating a fragmented landscape where different pool types coexist and attract different classes of traders and liquidity providers.
  4. Jupiter, also launched in 2021, functions as an aggregator rather than a venue. For swaps it holds no liquidity itself but queries multiple decentralized exchanges—Raydium, Orca, Meteora, and others—to find the optimal execution path for a swap. Jupiter splits large trades across several venues to minimize slippage and maximize price improvement. The protocol expanded beyond simple swaps to include limit orders, dollar-cost averaging, and perpetual futures, becoming a central interface for trading activity on Solana.
  5. The JUP token was airdropped in January 2024. While memecoin launch platforms like pump.fun migrate liquidity to these established pools upon graduation, the aggregator layer remains critical for execution quality. A single transaction involving a Jupiter swap may trigger cross-program invocations that interact with the SPL Token program, specific AMM programs, and system accounts simultaneously. This composability comes from a single shared state in which programs can call one another within one transaction, so a multi-step trade either completes entirely or not at all.
  6. To observe this routing in practice, open Jupiter’s interface and request a quote for a swap between two major assets like SOL and USDC. Examine the proposed route: it will list the specific pools used (e.g., Raydium CLMM, Orca Whirlpools) and the percentage of the trade allocated to each. Compare this with a direct quote from a single AMM like Raydium. The aggregator’s split often yields a better execution price for larger volumes by leveraging liquidity depth across multiple venues simultaneously.

Key facts

  • Raydium (2021) operates as an automated market maker using constant product formulas, while Serum was abandoned after FTX’s collapse in November 2022 and forked into OpenBook.
  • Orca provides concentrated-liquidity pools for capital efficiency, whereas Meteora’s DLMM pools raise fees as volatility rises.
  • Jupiter (2021) is a trading aggregator that routes swaps across multiple venues to optimize price, having added limit orders and perpetual futures to its core swap functionality.
  • The JUP token was distributed via an airdrop in January 2024.
  • Solana’s high throughput enables complex cross-program invocations where a single transaction interacts with multiple AMM programs and the SPL Token program simultaneously.
  • Memecoin launchpads move graduated tokens into AMM pools; pump.fun has used its own PumpSwap since March 2025.

Exercise nine, six, three, one

9CollectIdentify 9 distinct Solana DEX protocols or aggregator features. For each, note whether it holds its own liquidity (AMM/Order Book) or routes trades (Aggregator), and specify one unique pool type or order mechanism it supports.
6ClusterGroup the 9 items into 6 categories based on their architectural role: standard AMM pools, concentrated liquidity pools, dynamic fee pools, order books, aggregators/routers, and derivatives/limit order engines.
3DistillReduce these 6 groups to 3 mechanical differences in how a trader’s capital meets the protocol.
1CrystallizeWrite one sentence explaining why an aggregator like Jupiter exists if underlying AMMs like Raydium already provide price discovery.

Fact check

Dates, figures and claims checked against the published sources listed below.

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