Proprietary Automated Market Makers (AMMs) are a significant and growing force on Solana, processing substantial trading volumes and introducing a new paradigm in on-chain liquidity, driving efficiency but raising questions about decentralization.

Executive Summary

Proprietary Automated Market Makers (AMMs), operated by professional teams using their own capital, are rapidly emerging on Solana, significantly reshaping on-chain trading dynamics. These AMMs, which do not offer public liquidity access, now constitute a substantial portion of Solana's decentralized exchange (DEX) volume by prioritizing execution efficiency and lower slippage. While enhancing market performance, their operational model introduces considerations regarding transparency and decentralization within the Web3 ecosystem.

The Event in Detail

Proprietary AMMs differ from traditional, passive liquidity pools by functioning as active liquidity programs that continuously update quotes using on-chain oracles. Unlike conventional AMMs, they typically operate without public frontends or direct retail liquidity provision, relying instead on vault-based liquidity owned by the operator. User trades are predominantly routed to these AMMs via DEX aggregators, such as Jupiter or Titan, which query across exchanges for optimal price quotes. In August, these AMMs accounted for approximately $47 billion in spot trading on Solana, representing 31% of the total DEX volume. Their share exceeded 60% for SOL-stablecoin pairs since May. Over the past three months, SOL/USDC swaps averaged $1.5 billion in daily volume, with Proprietary AMMs consistently capturing over 60% of this market, peaking at 86% on July 5. Key players in this evolving segment include SolFi by Ellipsis Labs, Obric, HumidFi, GoonFi, and ZeroFi.

Solana's high throughput, low transaction fees, and efficient transaction ordering mechanics create an ideal environment for the proliferation of these AMMs. Lightweight and low-cost oracle updates, exemplified by HumidFi's optimization to 143 compute units (CUs)—over 1,000 times less than a typical Jupiter aggregator swap—enable frequent and economical quote refreshes. This capability is crucial for minimizing adverse selection and enhancing trade execution quality.

Market Implications

For users, Proprietary AMMs deliver tighter spreads, lower slippage, and improved protection from Maximal Extractable Value (MEV) attacks compared to public liquidity pool designs. By centralizing liquidity provision, these AMMs can safeguard order flow execution from high-frequency traders. For market participants and builders, this model offers enhanced capital efficiency through oracle-anchored pricing. The dominance of aggregators on Solana, with Jupiter capturing 86.4% of aggregator activity in July 2025, underscores a market structure that prioritizes execution quality.

The emergence of Proprietary AMMs suggests a "dual-track market" development within Decentralized Finance (DeFi). Carlos Gonzalez Campo of Blockworks Research predicts that traditional AMMs like Raydium will likely continue to dominate long-tail assets and new memecoins, while Proprietary AMMs such as HumidFi and SolFi are poised to control liquid markets, including SOL-USD and stable-to-stable pairs.

Broader Context

This paradigm shift in liquidity provision, where trading strategies are embedded directly into blockchain runtime, eliminates the latency of off-chain execution and delivers competitive pricing comparable to top centralized exchanges. The model, which has no direct analogue in traditional finance, signifies a professionalization of on-chain market making. However, the opacity of these Proprietary AMMs, often operating without public interfaces or detailed documentation, raises concerns regarding DeFi's core principles of transparency and decentralization. While transactions remain on-chain, the centralized nature of liquidity provision by a few professional teams introduces questions about the overall audibility and accessibility of the trading landscape on Solana.