Solana's Next Big Catalyst in 2026: Prop AMMs, Internet Capital Markets, and the Race to Become the On-Chain NASDAQ

The Solana ecosystem stands at a fascinating inflection point. Despite challenging price action in 2025—with SOL trading around $140 after reaching an intraday high of $290 following the Trump memecoin launch in January—the fundamental thesis for Solana as the dominant venue for on-chain price discovery has never been stronger. In this comprehensive analysis from the Lightspeed podcast's weekly roundup, Blockworks Research analysts Ryan Connor, Carlos Garcia, and Danny Kay dissect the transformative changes reshaping Solana's market structure and identify what could be the chain's most significant catalyst heading into 2026.

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The State of Solana: Separating Price Action from Ecosystem Health

Taking a macro view of Solana's position in late 2025 reveals a compelling divergence between market sentiment and ecosystem fundamentals. While the price action has been decidedly mixed since the explosive start to the year, the qualitative assessment of Solana's position remains remarkably bullish. The Blockworks Research team has spent considerable time re-evaluating the Solana ecosystem, and their conclusion is clear: by many measures, Solana remains the dominant chain with exceptional intellectual capital and talent.

The innovation happening within the ecosystem is particularly noteworthy, especially in the prop AMM space and market microstructure. The work being done by teams focused on block building and transaction landing represents a level of technical sophistication that few other ecosystems can match. Solana continues to lead in consumer experimentation, maintaining its position as the sole ecosystem that consistently pushes boundaries in consumer-facing applications.

What makes the current moment particularly interesting is the bifurcation emerging in how market participants view Solana. There was a period of exhaustion following Jito's BAM announcement in July, where Solana appeared to be losing ground in perpetual volumes and seeing limited innovation beyond established patterns like Pump.fun. However, the past month has witnessed a notable positive shift with developments that suggest Solana is "putting back the foot on the pedal."

The day-one listing of Monad tokens on Solana, competing directly with Hyperliquid on spot volumes, and the integration with Kalshi represent concrete evidence of renewed momentum. These developments indicate that Solana is positioning itself to be relevant in areas beyond just consumer applications, with DeFi applications emerging that are genuinely novel and could become significant over the coming months.

The Prop AMM Revolution: How Solana's Market Structure Changed Overnight

Prop AMMs have fundamentally transformed Solana's market structure in ways that few anticipated. These sophisticated market makers now account for over 60% of Solana DEX trading volumes, completely reshaping the competitive landscape to the detriment of traditional AMMs like Orca, Raydium, and Meteora.

The numbers are staggering. HumidiFi, the leading prop AMM, is not only beating every other DEX on Solana in SOL-USD trading volumes—it's now competing directly with Binance on a daily basis. The platform is averaging over $1 billion in volume just for the SOL-USD trading pair, with approximately 14 other pairs also quoted. This level of liquidity depth was unimaginable on a decentralized venue even two years ago.

For highly liquid assets, prop AMMs have become the undisputed norm. They dominate trading volumes through their ability to quote incredibly tight spreads that rival or even beat centralized exchanges. The expertise in high-frequency trading that these teams bring allows them to actively monitor ranges and update prices via oracles with precision that traditional AMMs simply cannot match.

The implications for traditional AMMs are significant. These platforms are increasingly competing solely for memecoin volumes, as any highly liquid asset gravitates toward prop AMMs. This bifurcation of on-chain volumes between prop AMMs and traditional AMMs based on asset maturity represents a fundamental restructuring of how trading works on Solana.

Perhaps most telling is the fate of Lefinity, the original prop AMM pioneer on Solana. Despite being the first to innovate with protocol-only liquidity and Oracle-based price adjustments, Lefinity appears to have ceased operations, with zero volumes recorded since November 20th. This illustrates just how competitive the prop AMM landscape has become and how difficult it is to compete against projects like HumidiFi or Sulfide that bring institutional-grade HFT expertise to the table.

The HumidiFi Token Launch: A Test Case for Market Expectations

HumidiFi's decision to launch the WET token through Jupiter's DTF platform represents a fascinating case study in how the market's expectations for token launches have evolved. As the top DEX on Solana—encompassing both prop AMMs and traditional AMMs—HumidiFi's token launch carries significant weight in terms of how investors can gain exposure to the prop AMM meta.

The tokenomics, however, have raised substantial questions in the community. The announcement lacks clarity on several critical points: whether the WET token has any ownership stake in the prop AMM operations, what utility exists beyond staking for rebates, and perhaps most importantly, why a profitable institution running a successful prop AMM would need to raise capital through an ICO.

The token structure appears to follow the FTT model, where staking provides discount trading fees. While this approach has historically been effective for exchange tokens, the crypto market has changed dramatically over the past 24 months. Investors now demand more communication, disclosure, and alignment. The market is no longer tolerant of the opaque structures that were common in 2021.

The 23% float at launch presents an interesting paradox. The team has witnessed how low-float, high-FDV tokens have performed poorly over the past two years, particularly within the Solana ecosystem with tokens like Amino and Jupe suffering from similar dynamics. Yet they've chosen to launch with what many would consider a low float themselves. The 90% allocated across foundation, team, and ecosystem categories requires greater transparency, especially since there's no clarity about who runs the HumidiFi foundation or what constitutes "ecosystem" allocation.

While the ICO valuation appears attractive at $50-69 million FDV for the pre-sale and public sale respectively, access will be extremely limited. Of the 10% total supply allocated to the ICO, just 2% will be available in the public sale on a first-come, first-served basis. The remaining allocation goes to Jupy stakers and whitelisted addresses determined by the team based on top traders and contributors.

The Rise of Ownership Coins and MetaDAO's Model

The emergence of ownership coins represents the market's self-correcting mechanism against the problematic token structures of the past. MetaDAO has positioned itself at the forefront of this movement, embedding token holder protections directly into launches in ways that fundamentally change the investment calculus.

Previously, investing in an ICO required significant discounting to account for various risks: the probability that teams would stop performing, walk away with funds, perpetrate outright scams, or create equity structures that captured value at the expense of token holders. The ownership coin meta directly addresses these challenges by embedding rights into the token itself.

The success of this model is evident in the market's response. MetaDAO has curated initial ownership coin launches with care, and while not every token performs well—which is expected in any market—the aggregate FDV trajectory from launches on the platform tells a positive story. The reduced discount rate that investors need to apply when participating in these launches makes the low-cap, seed-stage ICO model actually functional.

This development represents something remarkable: the market beating regulatory forces to the punch. Participants are demanding protections that neither existing laws nor market structures provide, and builders are responding by creating those protections themselves. Markets are inherently self-correcting, and what MetaDAO represents is this self-correction in action.

The broader market is also correcting through other mechanisms. Low-float, high-FDV tokens are being systematically punished by the market, sending clear signals to new founders that the deficiencies of traditional token launches are no longer acceptable. The discourse on Crypto Twitter reflects this shift, with participants increasingly questioning why new chains should launch at multi-billion dollar valuations at inception.

Internet Capital Markets: Solana's Path to On-Chain NASDAQ

Perhaps no vision captures Solana's potential more compellingly than the concept of Internet Capital Markets (ICM)—the idea that Solana could become the decentralized NASDAQ that Anatoly originally envisioned for the blockchain. The pieces required to fulfill this vision are finally falling into place.

A year ago, having any asset available for trading on Solana on day one was essentially impossible due to the absence of battle-tested bridge infrastructure and prop AMMs. Both variables have now matured sufficiently. Through Wormhole or Sunrise, any asset can be brought to Solana on day one. Through prop AMMs, deep liquidity can be provided with active monitoring and Oracle-based price updates.

The Monad trading example demonstrates this potential. Solana actually beat Hyperliquid in trading volumes during Monad's day-one trading, representing the first time Solana attempted this approach for a highly anticipated launch. This success suggests a real shot at becoming the on-chain venue for price discovery—not just for Solana-native assets, but for any asset in general.

The installed base matters enormously here. Phantom's position in the App Store with over 20 million monthly active users (as of January 2025) provides a foundation that few ecosystems can match. MetaMask may have reached 30 million MAUs in 2021, but likely hasn't maintained those numbers. The proximity of applications matters in crypto—a new chain is many clicks away from a Phantom user, creating friction that benefits Solana's position as a trading venue.

Projects benefit from this arrangement as well. Monad wants volume on its token, and if Solana enables higher volumes than they could achieve elsewhere, everyone wins. This creates a positive-sum dynamic where Solana provides the venue, prop AMMs provide the liquidity, and projects get the price discovery they need.

X-Stocks: The Underappreciated Strategic Asset

X-stocks represent what may be Solana's most strategically valuable but underappreciated asset class. Currently, most X-stock volume occurs on centralized exchanges, with SPL X-stocks doing between $20-60 million in volume per day. But the true potential lies in what X-stocks enable: efficient equity perpetuals.

The challenge with equity perps has always been hedging. Makers cannot achieve deep liquidity unless they can hedge their positions, and hedging in traditional financial market venues introduces massive friction. Crypto assets trade 24/7 while traditional markets have two-day clearing, limited trading hours, and only operate five days per week.

Kraken's trading of SPL tokens for X-stocks could become the venue that solves this problem—a place where participants can hedge positions or move capital quickly to enable better equity market perp structures on Solana. This represents a genuine opportunity for ecosystem leadership.

Kraken has been notably aggressive in this space, recently announcing their acquisition of Backed, which operates X-stocks. While Coinbase and Robinhood have discussed tokenized stock offerings, neither has moved as decisively. Robinhood has a test product in the EU, and Coinbase has given lip service to the idea, but neither has concrete products in market.

The technical barriers to supporting X-stocks on Solana no longer exist. Prop AMMs could quote these assets if sufficient on-chain interest develops. While volumes remain relatively low today, crossing certain thresholds of interest could trigger significant activity increases thanks to the improved market structure.

Prediction Markets: Beyond the Hype

Prediction markets have captured enormous attention, but the multi-billion dollar valuations being attached to anything with the prediction market label warrant scrutiny. The utility of betting on pure play outcomes—expressing a view on whether a company beats earnings without the stock price noise—is genuinely compelling. When reading an article about political events that doesn't reference Polymarket or Kalshi odds, the omission feels dishonest by the author.

However, traditional finance may be too quick to pump these valuations. The UK and Australia have had prediction markets for years without seeing breakout growth beyond sports and politics. While crypto's permissionlessness creates the highest probability ever for volume expansion and global reach, prudent skepticism is warranted.

The data tells a clear story about current activity patterns. The 2024 election was massive for trading activity, along with related events during that period. But 2025 has been dominated by sports betting activity. Kalshi has essentially become an on-chain sports betting application, partly due to their Robinhood integration and target consumer base.

The opportunity for bullishness lies not in the current activity but in unexplored combinations. Social networks and prediction markets represent particularly interesting territory. Betting is inherently social—most people only engage in social settings. Group chats are popular for betting discussions, from memecoin gambling to sports picks. Packaging prediction markets within a social experience could work, similar to how Crypto Twitter functions as an unbundled version with DEX Screener, Twitter, and exchanges all separate.

The key is selling into demographics where it makes sense rather than hoping new demographics emerge. Young males who enjoy risking small denominated amounts on parlays represent a proven market. Landing and expanding from that base offers more promise than attempting to create entirely new user categories.

The Perps Opportunity: Setting the Stage for 2026

The pieces required for successful perpetual trading on Solana are finally falling into place for a potential breakthrough in 2026. Prop AMMs bring deep liquidity and market microstructure expertise that positions them well to contribute. BAM and ACE allow perps exchanges to prioritize cancels and create other market microstructure rules for efficient perpetual trading on-chain. X-stocks enable efficient hedging of exposure.

Multiple approaches are being tested simultaneously, which increases the probability of finding the optimal solution. Jito BAM with Drift adopting BAM to prioritize cancels represents one approach. Bulk, planning to launch in early 2026, offers another model. Zeta is pursuing something resembling an app chain approach. This competition lets the market determine which approach works best.

The current state shows Jupiter Perps as the dominant venue, but with only three assets and limited new listings. Drift has been discussed extensively but hasn't achieved the market share that seemed possible. The expectation is that 2026 will provide clarity on which approaches succeed.

Client Diversity and Infrastructure Progress

When asked about Solana's throughput future and upgrades like Firedancer, the assessment has evolved significantly. Block times reduced below the 400-millisecond threshold and 50-millisecond shreds are expected over the coming months. Solana will continue leading in chain performance.

The October 10th metrics provide compelling evidence. While most EVM chains performed poorly during that volatility event, Solana continued working as intended. Some volatility occurred, but performance exceeded other chains and even centralized exchanges. Solana is currently the most performant blockchain in production, and improvements continue.

The Firedancer narrative has shifted from its initial conception. When people first became bullish on Firedancer, they underestimated how much progress Agave would make. Agave has made tremendous strides in performance, releasing a roadmap for the path to 1 million TPS that appears achievable.

A year ago, Firedancer seemed likely to win majority client share. But the extended launch timeline has allowed Agave to catch up, making the eventual client distribution likely much closer than initially expected. The Agave-Jito combination remains in the dominant position, followed by Frankendancer-Jito combinations and Agave with Jito BAM.

New entrants like the Harmonic block builder add additional competitive pressure, potentially taking share from Jito and further shaking up the landscape. This pattern of increasing competition across every niche—from launchpad wars to prop AMM wars to ICO platforms—represents healthy ecosystem development that benefits users through better outcomes.

Breakpoint 2025 and the 2026 Outlook

As Breakpoint 2025 approaches, anticipation builds for major announcements from teams across the ecosystem. DeFi developments will feature prominently, with maturation of yield-bearing stablecoins and yield-bearing instruments enabling yield markets to prosper on Solana.

The excitement around new net-new DeFi applications that genuinely innovate, rather than producing the same forks seen over the past four years, is palpable. Projects like Hylo with their decentralized stablecoin model featuring High USD and Excel represent the kind of innovation worth watching.

Looking at concrete catalyst priorities for 2026, equity perps stand out as potentially the most important development for any ecosystem over the next 12-24 months. The ability to create winners at both the app layer and ecosystem layer makes this an outsized opportunity. Watching BAM ship and seeing adoption, observing how Double Zero contributes to reducing latency, and monitoring X-stock adoption will be critical for understanding Solana's trajectory.

The Trump memecoin's lasting legacy may not be the token itself but the massive influx of stablecoin liquidity it brought on-chain. This capital has remained relatively sticky. Looking at Loopscale and Exponent TVL, these metrics haven't moved during market downturns because of the substantial stablecoin liquidity that isn't tethered to SOL price.

This resembles Ethereum's own evolution, where capital accumulated during 2021 and has remained largely sticky. Once capital enters a mature ecosystem, removing it becomes difficult. For Solana DeFi, this represents a foundation that didn't exist in prior years—builders can now tap into substantial on-chain liquidity that provides a genuine base for expansion.

The Competition Intensifying Across Every Vertical

The competition emerging across every vertical within the Solana ecosystem represents a fundamental shift from even a year ago. Pump.fun dominated the launchpad space, then launchpad wars erupted. Prop AMMs are now battling for supremacy. MetaDAO has competitors entering the ICO platform space. New teams are challenging Jito's long-standing dominance in the validator client space.

This competition benefits users through improved products, tighter spreads, better protections, and more innovation. The healthy competitive dynamic suggests an ecosystem that continues to attract talent and capital despite challenging market conditions.

For investors and builders, understanding this competitive landscape becomes essential. The winners in each category will capture significant value, but identifying them requires careful analysis of technical approaches, market fit, and team execution. The diversity of approaches being tested—from different perps models to various AMM structures to competing launch platforms—creates multiple paths to success while the market efficiently allocates resources to the most promising ventures.

The Path Forward

Solana's position heading into 2026 reflects both challenges and remarkable opportunities. The price action of 2025 disappointed many who expected the regulatory clarity and mainstream attention of January to sustain through the year. But separating price from fundamentals reveals an ecosystem that continues to lead in technical innovation, consumer adoption, and infrastructure development.

The prop AMM revolution has demonstrated that Solana can host trading venues that compete with centralized exchanges on their own terms. The Internet Capital Markets vision has moved from theoretical possibility to demonstrated reality with Monad's day-one trading. The infrastructure required for equity perps is materializing. Client diversity ensures competition drives improvement.

Perhaps most importantly, the capital has arrived and appears sticky. The stablecoin liquidity on Solana provides a foundation for the next phase of DeFi development that simply didn't exist before. New sources of yield for crypto natives and traditional finance participants will determine whether that capital grows or merely maintains.

The 2026 catalyst most worth watching may be equity perps—an opportunity that could create winners at both the application layer and ecosystem layer simultaneously. But the breadth of innovation across prediction markets, prop AMMs, ownership coins, and infrastructure ensures that multiple paths to success exist for Solana and its ecosystem participants.

What remains unchanged through all the market volatility is Solana's core thesis: that a high-performance blockchain optimized for price discovery and consumer applications can capture significant value in the emerging on-chain economy. The pieces are in place. The talent is building. The capital has arrived. The 2026 catalyst that crystallizes this potential could come from any direction—but the foundation exists for it to emerge.

Facts + Figures

• SOL Price Performance: Trading at approximately $140 in December 2025, down from an intraday high of $290 following the Trump memecoin launch in January 2025

• Prop AMM Market Share: Now account for over 60% of Solana DEX trading volumes, completely dominating traditional AMMs like Orca, Raydium, and Meteora

• HumidiFi Volume: Averaging over $1 billion in daily volume for SOL-USD trading pair alone, competing directly with Binance and beating every centralized exchange on this pair

• HumidiFi Token Launch: WET token launching with 23% float, $50-69 million FDV for pre-sale and public sale, with only 2% available in public sale on first-come first-served basis

• Phantom User Base: Over 20 million monthly active users as of January 2025, compared to MetaMask's peak of approximately 30 million in 2021

• X-Stocks Volume: SPL X-stocks doing $20-60 million in daily volume, mostly on centralized exchanges

• Lefinity Shutdown: The original prop AMM pioneer has ceased operations with zero volumes since November 20th

• Monad Day-One Trading: Solana beat Hyperliquid in trading volumes during Monad's token launch, with 60-80% of trading volume flowing through prop AMMs

• Kraken Acquisition: Acquired Backed, which operates X-stocks, signaling aggressive push into tokenized securities

• Block Time Goals: Targeting reduction below 400-millisecond threshold and 50-millisecond shreds in coming months

• Agave Progress: Released roadmap for "Path to 1 Million TPS" that analysts believe is achievable

• Client Distribution: Agave-Jito combination remains dominant, followed by Frankendancer-Jito and Agave with Jito BAM

• Prediction Market Activity: 2024 election was massive for volume, but 2025 has been dominated by sports betting activity on platforms like Kalshi

• Stablecoin Stability: Loopscale and Exponent TVL have not moved during market downturns due to sticky stablecoin liquidity

• October 10th Performance: Solana outperformed most EVM chains and even centralized exchanges during high-volatility event

Questions Answered

What are prop AMMs and why are they dominating Solana trading?

Prop AMMs (proprietary automated market makers) are sophisticated market-making protocols that bring institutional-grade high-frequency trading expertise to on-chain venues. They differ from traditional AMMs like Orca or Raydium by actively managing liquidity ranges, updating prices via oracles, and quoting spreads that can match or beat centralized exchanges. HumidiFi, the leading prop AMM on Solana, now averages over $1 billion in daily volume on just the SOL-USD pair, beating every other DEX and competing directly with Binance. The dominance of prop AMMs has fundamentally changed Solana's market structure, with these venues now handling over 60% of DEX trading volumes for liquid assets while traditional AMMs are increasingly relegated to memecoin trading.

Why is the HumidiFi token launch controversial?

The WET token launch from HumidiFi has generated controversy due to several unanswered questions about tokenomics and value accrual. The announcement lacks clarity on whether the token represents actual ownership in the prop AMM operations, what utility exists beyond staking for rebates, and why a profitable institution would need to raise capital through an ICO. The 23% float at launch also raises concerns, given how low-float high-FDV tokens have performed poorly across the Solana ecosystem. Additionally, 90% of the token is allocated to foundation, team, and ecosystem categories without transparency about who controls the foundation or what constitutes ecosystem allocation. While the ICO valuation of $50-69 million FDV appears attractive, only 2% of total supply will be available in the public sale.

What is the Internet Capital Markets vision for Solana?

Internet Capital Markets represents Solana's potential to become the decentralized NASDAQ—the on-chain venue for price discovery not just for Solana-native assets, but for any asset globally. This vision has become achievable because two key variables have matured: battle-tested bridge infrastructure through Wormhole and Sunrise enables any asset to trade on Solana from day one, while prop AMMs provide the deep liquidity needed through active range management and oracle-based pricing. The Monad example proved this concept when Solana beat Hyperliquid in trading volumes during Monad's day-one trading, with 60-80% of volume flowing through prop AMMs. Combined with Phantom's installed base of over 20 million users, Solana has a real opportunity to capture global price discovery.

Why are equity perps considered the most important catalyst for 2026?

Equity perpetuals are viewed as potentially the most significant development for any blockchain ecosystem over the next 12-24 months because they could create winners at both the application layer and ecosystem layer. The challenge with equity perps has been hedging—makers need to hedge positions, but traditional financial markets have friction including two-day clearing, limited hours, and five-day weeks. X-stocks on Solana could solve this by providing 24/7 hedging venues through SPL tokens. With prop AMMs bringing deep liquidity, BAM and ACE enabling market microstructure rules for efficient perp trading, and X-stocks enabling hedging, all pieces are falling into place. Kraken's acquisition of Backed demonstrates institutional recognition of this opportunity.

How has the market changed expectations for token launches?

The crypto market has fundamentally shifted in what it demands from token launches compared to 2021. Investors now expect communication, disclosure, and alignment with token holder interests. The ownership coin movement, pioneered by MetaDAO, addresses historical problems including teams abandoning projects, outright scams, and equity structures that capture value at token holders' expense. By embedding protections directly into tokens, these launches reduce the discount rate investors must apply. The market is also punishing low-float high-FDV tokens systematically, sending signals to founders that previous approaches are no longer acceptable. Even Pump.fun had to respond to market pressure by initiating buybacks to credibly demonstrate they cared about the token.

What's happening with Solana client diversity and Firedancer?

The Firedancer narrative has evolved significantly from initial expectations. A year ago, Firedancer seemed likely to capture majority client share, but the extended development timeline has allowed Agave to make substantial progress. Agave has released a roadmap for "Path to 1 Million TPS" that analysts consider achievable. Currently, the Agave-Jito combination remains dominant, followed by Frankendancer-Jito and Agave with Jito BAM. The client distribution is likely to be much closer between Agave and Firedancer than initially expected. New entrants like the Harmonic block builder add additional competition. Block times are expected to reduce below 400 milliseconds with 50-millisecond shreds in the coming months.

Why did stablecoin liquidity increase so much on Solana?

The Trump memecoin launch in January 2025, while disappointing for holders from day one to present, triggered a massive influx of stablecoin liquidity to the Solana ecosystem. This capital has proven relatively sticky, similar to how Ethereum accumulated capital during 2021 that has largely remained. Looking at DeFi protocols like Loopscale and Exponent, their TVL hasn't moved during market downturns because the stablecoin liquidity isn't tethered to SOL price. This represents a fundamental change for Solana DeFi—builders can now tap into substantial on-chain capital that didn't exist in prior years. The maturation of yield-bearing instruments and new sources of yield will determine whether this capital grows or simply maintains.

What is the current state of prediction markets on Solana?

Prediction markets have attracted significant hype with multi-billion dollar valuations, but the reality is more nuanced. Current activity shows sports and politics dominating volume, with crypto predictions also significant on platforms like Polymarket. Kalshi has essentially become an on-chain sports betting application, partly due to their Robinhood integration. While the 2024 election drove massive trading activity, 2025 has been dominated by sports betting. The opportunity for innovation lies in combining prediction markets with social networks, as betting is inherently social. However, traditional finance may be overly optimistic given that UK and Australian prediction markets never broke out beyond sports and politics despite years of operation.