Solana's Proprietary AMMs Capture Over 60% of Key Trading Volume, Rivaling Centralized Exchange Efficiency

Proprietary Automated Market Makers (AMMs) on the Solana blockchain have achieved efficiency levels comparable to centralized exchanges (CEXs), fundamentally reshaping the decentralized finance (DeFi) landscape. This development is shifting the competitive focus to the aggregator level, according to a recent statement by "tim | Titan" on social media. The tweet highlighted, > "solana prop amms have competed spreads to CEX efficiency the real battle is now on the aggregator level we're just getting started."

Proprietary AMMs, often referred to as "Prop AMMs" or "Dark AMMs," are operated by professional market-making firms utilizing their own capital and sophisticated, active strategies directly on-chain. Unlike traditional AMMs that rely on crowdsourced liquidity, Prop AMMs leverage Solana's high throughput and low transaction costs to enable rapid and frequent price updates, which are crucial for maintaining tight spreads.

These innovative AMMs are engineered to deliver significantly lower slippage and superior pricing for users, with some achieving slippage as low as 0-0.5 basis points, effectively competing with CEX order books. Their design minimizes adverse selection through optimized liquidity management and continuous oracle updates, allowing them to quote tighter and deeper price depths, thereby enhancing execution quality for traders.

The emergence of Prop AMMs has profoundly impacted Solana's trading volume. These platforms have consistently captured a substantial market share, particularly for high-volume pairs like SOL/USDC, frequently exceeding 60% of daily volume and reaching peaks of 86%. Prominent Prop AMMs such as HumidiFi, SolFi, and Tessera V have rapidly ascended, with HumidiFi notably becoming the largest DEX by trading volume at one point.

A critical factor in their success is their deep integration with DEX aggregators, predominantly Jupiter, which routes a vast majority of Solana's decentralized trading volume. Prop AMMs heavily depend on these aggregators to channel clean, non-toxic retail order flow, enabling them to concentrate solely on execution and pricing efficiency. The intensifying competition among these specialized AMMs is increasingly unfolding at the aggregator level, as they contend for optimal trade routing.

This paradigm shift signals a significant professionalization of on-chain market making, providing users with improved execution quality and solidifying Solana's reputation as a high-performance platform for financial applications. While enhancing efficiency, the rise of these often-opaque entities also sparks ongoing discussions regarding transparency and potential centralization within the broader DeFi ecosystem.