PropAMMs: The Silent Revolution Transforming Solana's Trading Infrastructure

The decentralized finance landscape on Solana is undergoing a fundamental transformation that many observers have yet to fully appreciate. Proprietary Automated Market Makers, commonly referred to as PropAMMs or Dark AMMs, have emerged as a dominant force in the ecosystem, now handling nearly half of all trading volume flowing through major aggregators like Jupiter. This shift represents more than just a change in market share—it signals a profound evolution in how liquidity is provisioned and how trades are executed on Solana, bringing the network's trading infrastructure closer to the efficiency standards of centralized exchanges.

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HumidiFi currently stands at the forefront of this movement, capturing an impressive 33% of all trading volume on Solana. However, they are far from alone in this space. Other notable players including SolFi, GoonFi, and Tessara are also processing substantial volumes, collectively reshaping the architecture of decentralized trading on the network. These entities operate fundamentally differently from traditional automated market makers, employing active liquidity management strategies that significantly improve execution quality for traders across the ecosystem.

Understanding Market Microstructure and Why It Matters

Market microstructure refers to the underlying plumbing that determines how trades and transactions flow through a financial system. This technical concept encompasses everything from transaction speed and latency to slippage, price impact, and the overall efficiency of order execution. While these details might seem arcane to casual observers, they are absolutely critical factors that determine whether professional traders and large institutions will participate in a given market.

When market microstructure is poor, characterized by high slippage, slow execution, and vulnerability to various forms of value extraction, liquidity tends to flee toward more efficient venues. This is precisely why so much cryptocurrency trading volume has historically remained concentrated on centralized exchanges rather than migrating to decentralized alternatives. The theoretical benefits of decentralization and self-custody cannot overcome the practical reality of inferior execution when significant capital is at stake.

Conversely, excellent market microstructure acts as a powerful attractor for liquidity. When traders can execute large orders with minimal slippage, fast confirmation times, and protection against predatory behavior, they naturally gravitate toward those venues. This creates a virtuous cycle where improved infrastructure attracts more liquidity, which in turn further improves execution quality, attracting even more liquidity.

The emergence of PropAMMs on Solana represents a significant leap forward in the network's market microstructure. By fundamentally reimagining how liquidity is provisioned and managed, these entities are solving many of the structural problems that have historically plagued decentralized exchanges and kept significant trading volume confined to centralized alternatives.

The Fundamental Difference: Passive vs. Active Liquidity

Traditional automated market makers like Raydium, Orca, or Meteora operate on a passive liquidity model. Users can visit these platforms, deposit their tokens into liquidity pools, select their desired price ranges, and then essentially step away while the protocol handles trading on their behalf. This approach has been revolutionary in its own right, enabling permissionless liquidity provision and opening up market making to anyone with capital, regardless of technical sophistication.

However, passive liquidity management comes with inherent limitations. The mathematical formulas that govern these pools—whether the simple x*y=k constant product formula or more sophisticated concentrated liquidity mechanisms—cannot adapt in real-time to changing market conditions. They cannot anticipate large trades, adjust to shifts in volatility, or optimize their positioning based on order flow information. This static nature creates opportunities for sophisticated traders to extract value from the pools, often at the expense of passive liquidity providers.

PropAMMs flip this model entirely on its head. Rather than accepting deposits from any user who wishes to provide liquidity, these entities use their own proprietary capital and actively manage that liquidity using sophisticated trading strategies. They employ teams of quantitative researchers and traders who continuously optimize their market making operations, adjusting positions in real-time based on market conditions, order flow analysis, and predictive models.

"These prop AMMs are using their own money and actively managing that liquidity. They don't even have a front end. You couldn't even go to use ZeroFi if you wanted to, like to deposit liquidity. Only those guys get to do it."

This active approach allows PropAMMs to provide much tighter spreads and deeper liquidity than would be possible with passive pools of equivalent size. They can dynamically adjust their quotes based on market conditions, pull liquidity when conditions become adverse, and optimize their positioning to maximize capital efficiency while minimizing adverse selection.

The Architecture of PropAMM Operations

PropAMMs operate through a distinctive architectural model that sets them apart from traditional DeFi protocols. Unlike Uniswap, Raydium, or other conventional AMMs that provide user interfaces where anyone can interact directly with the protocol, PropAMMs typically have no front-end interface at all. There is no website where users can deposit funds or view pool statistics. The entire operation is managed internally by the team running the PropAMM.

Instead of building their own user-facing applications, PropAMMs integrate with aggregator platforms like Jupiter, Prism, and others that route trades across multiple liquidity sources to find optimal execution for users. When you execute a swap on Jupiter, the aggregator queries all available liquidity sources—including traditional AMMs, order books, and PropAMMs—and routes your trade through whichever combination offers the best price.

This integration model allows PropAMMs to access significant order flow without needing to build consumer-facing products or conduct extensive marketing campaigns. They can focus entirely on what they do best: optimizing their market making strategies and providing superior liquidity. The aggregators handle user acquisition, interface design, and the overall trading experience.

The relationship is symbiotic. Aggregators benefit from having access to deeper, more efficient liquidity, which allows them to offer better execution to their users. PropAMMs benefit from consistent order flow without needing to compete directly for retail attention. And traders benefit from improved execution quality that neither party could provide independently.

How PropAMMs Reduce MEV and Improve Execution

One of the most significant advantages of PropAMMs lies in their ability to mitigate Maximum Extractable Value (MEV), a persistent challenge in decentralized finance. MEV refers to the profit that can be extracted by reordering, inserting, or censoring transactions within a block. In the context of trading, this often manifests as sandwich attacks, where a predatory actor front-runs a user's trade, artificially moves the price, and then back-runs to capture profit at the user's expense.

Traditional AMMs are particularly vulnerable to MEV extraction because all of their state—pool reserves, pending transactions, and price curves—is publicly visible on the blockchain. Sophisticated actors can observe pending transactions in the mempool, calculate exactly how much they can extract, and execute their attacks with precision. This leakage of value degrades execution quality for ordinary users and represents a hidden tax on decentralized trading.

PropAMMs reduce MEV exposure through several mechanisms. First, because they actively manage their liquidity rather than relying on static mathematical formulas, they can adjust their quotes in response to suspicious order flow patterns. Second, many PropAMMs employ proprietary execution strategies that make it more difficult for attackers to predict and exploit their behavior. Third, some PropAMMs operate through private or semi-private channels that reduce the visibility of their order flow to potential extractors.

The result is meaningfully better execution for end users. Trades that might have been subject to sandwich attacks or other forms of value extraction on traditional AMMs can execute cleanly through PropAMMs, with the full benefit accruing to the trader rather than being siphoned off by MEV bots.

The Scale of the PropAMM Revolution

The impact of PropAMMs on Solana's trading ecosystem has been nothing short of remarkable. According to data from Jupiter, these proprietary market makers now handle nearly half of all volume flowing through the aggregator. This represents hundreds of millions of dollars in daily trading volume, with weekly volumes consistently reaching into the billions of dollars.

"Right now, we're going to just look at Jupiter volume, just because it's just the dashboard that I can find. But nearly half of the volume that's going through here is happening through these prop AMMs. That is crazy."

HumidiFi leads the pack with approximately 33% market share, but the competitive landscape includes multiple strong players. SolFi, GoonFi, and Tessara have all established significant presences, and new entrants continue to emerge as the opportunity becomes more widely recognized. This competitive dynamic is healthy for the ecosystem, as it drives continuous innovation and prevents any single entity from extracting monopoly rents.

The scale of this shift happened relatively quickly, catching many observers by surprise. Just two years ago, the very concept of PropAMMs barely existed in the Solana ecosystem. Today, they represent the dominant source of liquidity for many trading pairs. This rapid adoption speaks to the genuine value these entities provide—if their execution wasn't meaningfully better, aggregators wouldn't route to them, and their market share would never have grown so dramatically.

Real-World Impact: Million Dollar Trades with Minimal Slippage

Perhaps the most tangible demonstration of PropAMM effectiveness comes from examining real execution quality on large trades. In the past, executing a significant trade on a decentralized exchange—say, buying or selling a million dollars worth of SOL—would have been an exercise in frustration. The price impact would have been substantial, slippage would have eaten into returns, and MEV extractors would have taken their cut.

Today, the situation is dramatically different. As demonstrated in real-time, a million dollar SOL trade on Jupiter now executes with only approximately three basis points of slippage. This is execution quality that rivals or even exceeds what's available on many centralized exchanges, representing a genuine breakthrough in decentralized trading infrastructure.

"I just was doing this. You can see I have insufficient USDC because I don't have a million dollars, but you could do a million dollar trade for Sol with three bits of slippage. That's incredible. Like two years ago, this would have been impossible."

This improvement has profound implications for the types of traders and trading strategies that can operate effectively on Solana. Institutional traders who previously avoided decentralized venues due to execution concerns can now participate meaningfully. Large token holders can rebalance positions without suffering excessive slippage. And sophisticated trading strategies that require tight execution can now be implemented on-chain.

The Strategic Importance for Solana's Future

The development of PropAMMs carries strategic significance for Solana that extends far beyond the immediate improvements to trading execution. In the broader competition among blockchain networks to attract liquidity and users, the quality of trading infrastructure plays a crucial role. Networks that offer superior execution will naturally attract more trading activity, which brings more fee revenue, more developer interest, and more ecosystem growth.

"The takeaway though is that this is great for Solana. It's a trickier question for other individual players in Solana, but it's extremely bullish in my opinion because it makes our execution on par with centralized exchanges."

For Solana to fulfill its potential as a global financial settlement layer, it must offer trading infrastructure that can compete with the best centralized alternatives. PropAMMs represent a significant step in that direction, demonstrating that decentralized trading can achieve institutional-grade execution quality without sacrificing the benefits of permissionless access and self-custody.

This is particularly important as the industry anticipates increased institutional adoption of cryptocurrency. Pension funds, endowments, asset managers, and other large allocators have traditionally been hesitant to engage with decentralized finance due to concerns about execution quality, security, and operational complexity. As PropAMMs demonstrate that these concerns can be addressed, the barriers to institutional participation continue to fall.

The Complexity of Ecosystem Dynamics

While PropAMMs are unambiguously positive for Solana as a whole, their rise creates more complicated dynamics for other participants in the ecosystem. Traditional AMMs that have built significant businesses around passive liquidity provision may find their market share eroding as PropAMMs demonstrate superior efficiency. This competitive pressure could drive consolidation or require traditional players to evolve their models.

For retail liquidity providers who have earned yield by depositing tokens into AMM pools, the picture is similarly nuanced. If PropAMMs capture an increasing share of trading volume, the remaining volume flowing through traditional pools may decline, potentially reducing the returns available to passive LPs. This could accelerate the concentration of market making activity among sophisticated operators.

However, this transition also creates new opportunities. Some traditional AMM protocols are exploring hybrid models that incorporate elements of active liquidity management. Others are focusing on long-tail assets where PropAMMs may be less interested in providing liquidity. And the overall growth in trading activity that better execution enables could expand the total pie, even as its distribution shifts.

The key insight is that the rise of PropAMMs represents a maturation of Solana's market structure toward greater efficiency. As with any maturation process, there will be winners and losers, but the overall system emerges stronger and more capable of serving its users.

Understanding the "Dark AMM" Terminology

PropAMMs are sometimes referred to as "Dark AMMs" or "Ghost AMMs" by critics or those skeptical of their model. This terminology draws an analogy to "dark pools" in traditional finance—private exchanges where institutional traders can execute large orders without revealing their intentions to the broader market. The implication is that there's something opaque or potentially problematic about these entities.

However, this characterization oversimplifies a more nuanced reality. While it's true that PropAMMs don't expose their internal state the way traditional AMMs do, they still operate on public blockchains where their trades are ultimately visible. They compete for order flow through aggregators based on the quality of quotes they provide. And their success or failure is determined by whether they can offer better execution than alternatives.

The "darkness" isn't about hiding from users or regulators—it's about protecting against MEV extraction and optimizing execution quality. In many ways, PropAMMs are simply doing what professional market makers do in every financial market: using proprietary strategies and information advantages to provide liquidity efficiently.

The terminology debate ultimately reflects deeper questions about what decentralization means in practice and whether efficiency gains from more centralized approaches are worth accepting. These are important questions for the community to grapple with, but they shouldn't obscure the genuine benefits that PropAMMs provide to traders.

The Technology Enabling PropAMM Success

PropAMMs wouldn't be possible without several technological capabilities that Solana uniquely provides. The network's high throughput and low latency are essential for active market making strategies that require frequent position adjustments. The low transaction costs make it economical to manage liquidity actively rather than relying on passive formulas. And the network's reliability ensures that market makers can execute their strategies consistently without being blocked by congestion or outages.

Solana's unique parallel execution model, enabled by the Sealevel runtime, allows PropAMMs to operate complex strategies without worrying about state contention blocking their transactions. This is particularly important during periods of high volatility when market makers most need to adjust their positions. Networks with sequential execution often become congested precisely when traders most need to transact, creating a fundamental conflict that PropAMMs can avoid on Solana.

The Solana ecosystem has also developed sophisticated infrastructure for programmatic trading that PropAMMs leverage extensively. Libraries like Anchor make it easier to build and interact with on-chain programs. Helius and other data providers offer low-latency access to blockchain state. And the vibrant developer community continuously produces tools and frameworks that make sophisticated trading operations more accessible.

Comparison with Traditional Finance Market Making

PropAMMs represent a convergence between traditional finance market making and decentralized finance infrastructure. In traditional markets, designated market makers on exchanges like NYSE or Nasdaq provide liquidity in return for certain privileges and obligations. They use sophisticated technology, quantitative strategies, and significant capital to maintain orderly markets and ensure traders can execute efficiently.

The parallels to PropAMMs are clear. Like traditional market makers, PropAMMs use proprietary capital and strategies to provide liquidity. They compete based on the quality of their quotes and execution. And they play an essential role in making markets function efficiently. The key difference is that PropAMMs operate on decentralized infrastructure, accessible to anyone rather than restricted to licensed entities.

This convergence suggests that the future of market making may look quite different from the past. Rather than a handful of licensed market makers operating on centralized exchanges, we may see a more diverse ecosystem of PropAMMs operating across decentralized venues. The barriers to entry are lower, the infrastructure is more accessible, and the competitive dynamics favor innovation over incumbency.

For Solana, this evolution positions the network as a serious venue for institutional-grade trading. The presence of sophisticated market makers willing to commit significant capital is a vote of confidence in the network's infrastructure and future prospects.

The Role of Aggregators in the PropAMM Ecosystem

Aggregators like Jupiter play a crucial intermediary role in the PropAMM ecosystem, serving as the bridge between end users and the various liquidity sources available on Solana. When a user wants to execute a trade, the aggregator queries all available venues—including traditional AMMs, order books, and PropAMMs—to construct the optimal execution path.

This aggregation model creates several important dynamics. First, it commoditizes liquidity provision to some extent—what matters to the aggregator is getting the best price, not which specific venue provides it. This creates intense competition among liquidity sources, driving continuous improvement in execution quality.

Second, aggregators enable PropAMMs to operate without building consumer-facing products. A PropAMM can focus entirely on optimizing its market making strategies, knowing that aggregators will route volume to it if its quotes are competitive. This specialization allows each player to focus on what they do best.

Third, the aggregator model provides important protections for users. Rather than needing to understand the intricacies of different liquidity sources, users can simply submit trades to the aggregator and trust it to find the best execution. This abstraction layer makes sophisticated market structure accessible to casual users.

Jupiter's dominance in Solana aggregation means that its routing algorithms have significant influence over which liquidity sources succeed. The fact that PropAMMs have captured nearly half of Jupiter volume suggests that their execution quality genuinely outperforms alternatives—if it didn't, Jupiter's algorithms would route elsewhere.

Security Considerations and Risk Management

PropAMMs introduce different risk profiles than traditional AMMs, and understanding these differences is important for assessing the overall health of the ecosystem. Traditional AMMs spread risk across many passive liquidity providers, each of whom bears a portion of the impermanent loss and other risks associated with market making. PropAMMs concentrate these risks within their organizations.

This concentration has both advantages and disadvantages. On the positive side, PropAMMs are presumably more sophisticated at managing market making risks than average retail LPs. They have professional teams, risk management systems, and the expertise to navigate challenging market conditions. This professionalism may actually reduce systemic risk compared to having many inexperienced LPs making poor decisions.

On the negative side, PropAMM failures could be more impactful given their concentration. If a major PropAMM suffers a significant loss or operational failure, the sudden withdrawal of its liquidity could create execution challenges for traders and potentially cascade through the ecosystem. The concentration of market share in a handful of entities creates some degree of counterparty risk.

However, the competitive nature of the PropAMM market provides some natural resilience. Multiple PropAMMs compete for order flow, and if one withdraws or fails, others can step in to fill the gap. The aggregator model means users aren't locked into any particular liquidity source. And the transparent nature of on-chain trading means any problems become visible quickly.

Future Evolution of PropAMMs

The PropAMM landscape continues to evolve rapidly, with new entrants, strategies, and business models emerging regularly. Several trends seem likely to shape the future development of this sector.

First, we may see increased specialization among PropAMMs. Some may focus on particular trading pairs or asset types where they have competitive advantages. Others may specialize in certain market conditions or trading strategies. This specialization could drive further improvements in execution quality as each PropAMM optimizes for its niche.

Second, the line between PropAMMs and traditional AMMs may blur. Some traditional AMM protocols are exploring more active management features, while some PropAMMs may experiment with allowing external capital. Hybrid models could emerge that combine the accessibility of traditional AMMs with the efficiency of active management.

Third, PropAMMs may expand beyond simple spot trading into derivatives, lending, and other DeFi primitives. The same skills that enable efficient spot market making—quantitative modeling, risk management, technology infrastructure—translate well to other financial products.

Fourth, regulation may increasingly touch PropAMM operations. While currently operating in a relatively unregulated environment, PropAMMs that handle significant volumes may attract regulatory attention. How they respond to this attention could shape the long-term evolution of the sector.

The Broader Trend Toward Market Efficiency

PropAMMs are part of a broader trend toward improved market efficiency across the cryptocurrency ecosystem. Other developments—including better order books, improved oracle systems, more sophisticated trading tools, and enhanced data availability—all contribute to making on-chain markets more competitive with centralized alternatives.

This trend toward efficiency reflects the maturation of the cryptocurrency industry. In its early days, crypto was characterized by wide spreads, significant slippage, and numerous inefficiencies that sophisticated traders could exploit. As the industry has grown, competition has driven out many of these inefficiencies, and markets have become progressively more professional.

PropAMMs represent perhaps the most dramatic example of this professionalization in the AMM space. Where early AMMs were simple, passive, and often inefficient, PropAMMs bring institutional-grade market making to decentralized infrastructure. The result is an execution environment that can genuinely compete with the best centralized alternatives.

For users, this evolution is unambiguously positive. Better execution means more of their capital goes toward their intended trades rather than being extracted as slippage, fees, or MEV. For the ecosystem, better execution attracts more trading activity, which generates more fee revenue and supports continued development. And for the broader mission of decentralized finance, better execution proves that decentralized infrastructure can match or exceed centralized alternatives on their own terms.

Implications for Retail Traders

While much of the PropAMM impact is most visible for large trades, retail traders also benefit significantly from the improved market structure. Even small trades benefit from tighter spreads and reduced MEV exposure. The competitive pressure that PropAMMs create forces all liquidity sources to improve their execution quality, raising the overall standard across the ecosystem.

Retail traders may also benefit indirectly from the increased liquidity depth that PropAMMs provide. More liquid markets are generally more stable, with less volatile price movements in response to individual trades. This stability makes it easier for retail traders to execute their strategies without worrying about market impact or timing.

The aggregator model ensures that retail traders automatically benefit from PropAMM liquidity without needing to understand the underlying market structure. When a retail user swaps tokens on Jupiter or another aggregator, the system automatically routes through PropAMMs when they offer the best execution. The user doesn't need to know or care about the complexity happening behind the scenes.

The Competitive Landscape Among PropAMMs

The PropAMM space on Solana has quickly become competitive, with multiple well-funded teams vying for market share. HumidiFi's current dominance with 33% of trading volume demonstrates that first-mover advantage matters, but the presence of strong competitors like SolFi, GoonFi, and Tessara ensures that no single entity can become complacent.

This competition drives continuous innovation in market making strategies, technology infrastructure, and operational efficiency. PropAMMs that fall behind on execution quality will lose volume to competitors, creating strong incentives for improvement. Users benefit from this competition through better execution quality than any single PropAMM would provide in the absence of competitive pressure.

The competitive dynamics also provide some natural protection against monopolistic behavior. If any PropAMM tried to extract excessive profits by widening spreads, competitors would quickly capture that volume. The aggregator model makes switching between liquidity sources seamless, ensuring that competition remains fierce.

New entrants continue to join the space, attracted by the significant volume and apparent profitability of successful PropAMMs. These new competitors bring fresh ideas and approaches, ensuring that innovation continues even as the market matures. The relatively low barriers to entry—compared to traditional market making—mean that talented teams can compete effectively without needing exchange licenses or regulatory approvals.

Looking Ahead: PropAMMs and Solana's Future

The rise of PropAMMs represents one of the most significant developments in Solana's DeFi ecosystem, with implications that extend far beyond the immediate improvements to trading execution. By demonstrating that decentralized infrastructure can support institutional-grade market making, PropAMMs strengthen Solana's competitive position and expand the range of users and use cases the network can serve.

"It's extremely bullish in my opinion because it makes our execution on par with centralized exchanges, and it's necessary if we ever want to move a lot of that liquidity off of traditional markets and onto crypto rails and onto Solana specifically."

As more trading volume migrates from centralized exchanges to decentralized venues, the networks with the best infrastructure will capture the largest share. Solana's PropAMM ecosystem positions it well to compete for this volume, offering execution quality that increasingly rivals the best centralized alternatives.

The teams building PropAMMs deserve recognition for their contribution to the ecosystem. While they operate largely behind the scenes, without the consumer-facing presence of traditional DeFi protocols, their impact on trading quality is substantial. Every trader executing through Jupiter benefits from their work, whether they know it or not.

The coming years will likely see continued evolution in the PropAMM space, with new strategies, new entrants, and new challenges. But the fundamental insight—that active liquidity management can outperform passive alternatives—seems durably true. PropAMMs are not a temporary phenomenon but rather a permanent feature of Solana's market structure, one that will continue to improve trading quality and attract liquidity to the network.

Facts + Figures

• HumidiFi currently leads Solana's PropAMM market with approximately 33% of all trading volume on the network

• PropAMMs now handle nearly half (approximately 50%) of all trading volume flowing through Jupiter aggregator

• Other major PropAMM players include SolFi, GoonFi, and Tessara, all processing significant volumes

• Weekly trading volume through PropAMMs reaches into the billions of dollars

• A $1 million SOL trade can now execute with only approximately 3 basis points of slippage on Solana

• This level of execution quality would have been "impossible" just two years ago according to market observers

• PropAMMs operate without front-end interfaces—users cannot deposit liquidity directly, only the teams managing them can provide capital

• Unlike traditional AMMs that use passive liquidity provision, PropAMMs actively manage their proprietary capital

• PropAMMs integrate exclusively through aggregators like Jupiter rather than building consumer-facing products

• The improved execution quality helps reduce MEV (Maximum Extractable Value) extraction from traders

• Traditional AMMs allow any user to deposit liquidity and select price ranges, while PropAMMs restrict this to their internal teams

• PropAMMs are sometimes referred to as "Dark AMMs" or "Ghost AMMs" by critics

• Market microstructure improvements from PropAMMs are bringing Solana's execution quality "on par with centralized exchanges"

• The rise of PropAMMs is considered "extremely bullish" for Solana's competitive positioning

• Poor market microstructure historically "repels liquidity and keeps people on centralized exchanges"

Questions Answered

What are PropAMMs and how do they differ from traditional AMMs?

PropAMMs, or Proprietary Automated Market Makers, are entities that provide liquidity using their own capital with active management strategies, rather than accepting deposits from public users. Unlike traditional AMMs where anyone can deposit tokens into pools and earn passive yield, PropAMMs don't have front-end interfaces and only their internal teams can manage the liquidity. They integrate with aggregators like Jupiter to access trading volume, and their active management approach allows them to provide tighter spreads and better execution than passive liquidity pools. This fundamental difference between passive and active liquidity management is what enables PropAMMs to achieve significantly better trading outcomes for users.

How much of Solana's trading volume do PropAMMs currently handle?

PropAMMs now handle nearly half of all trading volume flowing through Jupiter, Solana's dominant aggregator. HumidiFi alone captures approximately 33% of all trading volume on the network, making it the market leader in this space. Other significant players including SolFi, GoonFi, and Tessara contribute additional volume, and weekly trading through these entities reaches into the billions of dollars. This rapid market share gain demonstrates the genuine execution quality advantages that PropAMMs provide compared to traditional AMMs.

Why are PropAMMs sometimes called "Dark AMMs"?

The "Dark AMM" or "Ghost AMM" terminology is used by critics who draw parallels to dark pools in traditional finance—private exchanges where large trades can execute without revealing intentions to the broader market. The term reflects concerns about the opacity of PropAMM operations, since these entities don't expose their internal state the way traditional AMMs do. However, supporters argue this "darkness" is about protecting against MEV extraction and optimizing execution quality rather than hiding from users or regulators. All PropAMM trades still occur on the public blockchain and are ultimately visible.

How do PropAMMs reduce MEV (Maximum Extractable Value)?

PropAMMs reduce MEV exposure through several mechanisms tied to their active management approach. Because they actively manage liquidity rather than relying on static formulas, they can adjust quotes in response to suspicious order flow patterns that might indicate sandwich attacks or other exploitative behavior. Many PropAMMs also employ proprietary execution strategies that make it harder for attackers to predict and exploit their behavior. Some operate through private or semi-private channels that reduce visibility to potential extractors. The result is better execution for end users, with trades that might have been sandwiched on traditional AMMs executing cleanly.

What impact have PropAMMs had on large trade execution on Solana?

The impact on large trade execution has been dramatic. A $1 million SOL trade can now execute with only approximately 3 basis points of slippage on Solana, which represents execution quality rivaling or exceeding many centralized exchanges. Just two years ago, this level of execution would have been impossible on decentralized venues. This improvement opens Solana to institutional traders, large token holders, and sophisticated trading strategies that require tight execution to be viable. The improvement stems directly from PropAMMs like HumidiFi providing deep, efficient liquidity.

How do PropAMMs access trading volume without having user interfaces?

PropAMMs access trading volume exclusively through integration with aggregator platforms like Jupiter. When users execute swaps through these aggregators, the platform queries all available liquidity sources—including traditional AMMs, order books, and PropAMMs—and routes trades through whichever combination offers the best price. This model allows PropAMMs to focus entirely on optimizing their market making strategies without needing to build consumer-facing products or conduct marketing campaigns. The aggregators handle user acquisition and interface design while PropAMMs handle liquidity provision.

Why is the rise of PropAMMs considered positive for Solana?

The PropAMM trend is extremely bullish for Solana because it brings the network's execution quality on par with centralized exchanges. This improved infrastructure is necessary if significant liquidity is ever to migrate from traditional markets onto crypto rails and specifically onto Solana. Good market microstructure—characterized by fast execution, low slippage, and MEV protection—attracts liquidity and users, while poor microstructure repels them. By demonstrating that decentralized infrastructure can support institutional-grade market making, PropAMMs strengthen Solana's competitive positioning against both centralized exchanges and other blockchain networks.

What technological capabilities enable PropAMMs to succeed on Solana?

PropAMMs leverage several Solana-specific technological advantages. The network's high throughput and low latency are essential for active market making strategies requiring frequent position adjustments. Low transaction costs make active liquidity management economical compared to relying on passive formulas. Solana's parallel execution model (Sealevel runtime) allows PropAMMs to operate complex strategies without state contention blocking transactions. The ecosystem's sophisticated infrastructure for programmatic trading—including development frameworks like Anchor and low-latency data providers like Helius—makes building and operating PropAMMs more accessible than on other networks.