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<p>Many thanks to 0xIchigo and Ramzy Ali for reviewing earlier versions of this work.</p><h2>Actionable Insights</h2><ul class="list-bullet"><li value=1>Proprietary AMMs represent a paradigm shift in how liquidity is provisioned on-chain. By embedding trading strategies directly into the runtime, they eliminate the latency of off-chain execution and offer tighter, more competitive pricing that rivals top centralized exchanges. The model has no direct analogue in traditional finance.</li><li value=2>Proprietary AMMs have emerged specifically on Solana, fueled by structural factors distinct to the network, including its robust retail base, transaction ordering mechanics, aggregator-concentrated order flow, and a high-throughput, low-cost environment suited for high-frequency price updates.</li><li value=3>Proprietary AMMs differ from traditional AMMs by providing <em>active liquidity</em>. Pricing strategies are continuously adjusted, independent of trade activity, rather than remaining static until liquidity is consumed. This active approach, which in many cases outperforms <em>passive liquidity </em>models such as constant-product or concentrated-liquidity DEXs, signals a broader structural shift in how on-chain liquidity is provided.</li><li value=4>Over the past 60 days, daily trading volumes across all proprietary AMMs on Solana have consistently exceeded $1 billion. </li><li value=5>Over the past three months, SOL/USDC swaps averaged around $1.5 billion in daily volume. Proprietary AMMs have consistently captured more than 60% of this market, peaking at 86% on July 5.</li><li value=6>A critical enabler of proprietary AMMs is lightweight, low-cost oracle updates, which allow quotes to be refreshed far more cheaply than a standard swap. For instance, HumidiFi has optimized its oracle updates to just 143 CUs, over 1,000 times less than that requested by a typical Jupiter aggregator swap.</li><li value=7>Lightweight oracle updates with minimal CU requirements need only small tips to secure top positions in the Jito auction queue. This gives market makers a cost-effective form of “cancel priority,” enabling them to refresh quotes ahead of taker transactions and reduce exposure to adverse selection.</li><li value=8>A proprietary AMM expresses its quotes through a pricing curve, which can be updated through a few parameter adjustments, making it far more computationally efficient than managing individual order book quotes. By concentrating liquidity tightly around the latest oracle price, the AMM achieves extremely high capital efficiency.</li><li value=9>Solana’s proprietary AMMs rely heavily on trade flow from the Jupiter aggregator. In July, aggregator-driven trades accounted for 99.2% of all volume on GoonFi, 97.3% on ZeroFi, 92.5% on Orbic, and 88.4% on SolFi. Over 40% of all Solana DEX swap volume flows through aggregators.</li><li value=10>Because Jupiter dominates Solana’s aggregator market, new proprietary AMMs only need a single integration to gain immediate, wide distribution to non-toxic retail order flow.</li></ul><h2>Introduction</h2><p>Over the past several months, Solana’s trading landscape has undergone a dramatic shift. A roster of unfamiliar new DEXs (SolFi, ZeroFi, Tessera, HumdiFi, etc.) has rapidly seized market share, reshaping the structure of on-chain liquidity. Their rapid dominance has left many observers wondering how these platforms emerged seemingly out of nowhere and why they now account for such a large share of trading activity.</p><p></p><p>The answer lies in a new market-making primitive pioneered on Solana: <em>proprietary AMMs</em>, a blockchain native model with no direct analogue in traditional finance. Proprietary AMMs represent a paradigm shift in how liquidity is provisioned, moving the core trading logic, normally executed on private servers, directly on-chain within Solana programs. Each proprietary AMM program functions as an independent trading venue, operated by its respective market maker. By embedding strategies into the runtime itself, proprietary AMMs eliminate the latency introduced by off-chain execution and deliver tighter, more competitive pricing.</p><p></p><p>This innovation (an overused term, but in this case not an overstatement) has already transformed Solana’s spot markets, with proprietary AMMs now dominating trading in major pairs. The dynamic they introduce, <em>active liquidity</em> provision that directly competes with and increasingly outperforms <em>passive liquidity</em> models, signals a broader structural change. Market making on Solana is evolving in favor of sophisticated, on-chain-native participants, and away from passive crowdsourced liquidity pools. The implications for users and liquidity providers alike are profound.</p><p></p><p><a href="https://x.com/i/web/status/1953514353501909419" target="_blank" rel="noopener noreferrer">View X post</a></p><p></p><p>Proprietary AMMs are difficult to research, and as a result, very little beyond trading data has been published about them. They primarily operate without frontends, public IDLs, documentation, marketing, or community channels, and unlike public DEXs, they do not allow retail users to provide liquidity. The space is fiercely competitive, and even the slightest efficiency gain can offer an edge, making secrecy the norm, much like with traditional HFT firms. These proprietary AMMs are operated by crypto-native market makers, many of whom have chosen to remain anonymous.</p><p></p><p>Proprietary AMMs are a Solana-specific development, enabled by a set of structural factors unique to the network:</p><p></p><ul class="list-bullet"><li value=1><strong>High Retail Participation </strong>– Solana’s strong retail user base makes the network an attractive venue for market makers.</li><li value=2><strong>Transaction Ordering Mechanics </strong>– Compute Units (CUs) play a central role in transaction prioritization, creating opportunities for specialized execution strategies.</li><li value=3><strong>Aggregator Dominance </strong>– A single leading aggregator channels much of the retail order flow, providing an accessible one-stop shop for distribution.</li><li value=4><strong>Developer Strength </strong>– Solana boasts a diverse ecosystem of protocols and skilled developers, fostering innovation and experimentation.</li><li value=5><strong>Low-cost, High-throughput Environment</strong> – the fast and cheap price updates required by the proprietary AMMs make the model best suited to blockchains with high TPS.</li></ul><p>The terminology for this emerging class of new market makers remains unsettled; some refer to them as “proprietary AMMs,” while others frame them as “dark pools.”</p><p>In traditional finance, dark pools are private trading venues where institutions execute large block trades away from public exchanges, keeping their intentions hidden to avoid moving the market. Proprietary trading, meanwhile, refers to firms deploying their own capital rather than client funds.</p><p>“Dark” in the context of proprietary AMMs refers less to hidden order flow and more to the opacity of how these AMMs function. Their swap logic is not publicly disclosed, and without a published IDL, it can be challenging to determine how to interact with the programs. Observers may analyze transactions or attempt to reverse-engineer their logic, but even then, the program can be upgraded at any time to block unwanted integrations. This opacity is very much a feature, not a bug, for the operators, as it’s harder for toxic takers to trade against something they can’t fully see or understand.</p><p>A third framing is “oracle-based AMMs,” a label early pioneer Lifinity has long used for itself. Here, the defining feature is reliance on oracle feeds to anchor trades to fair market value. Many view rapid, cheap oracle updates as the key breakthrough of this new model of on-chain trading, effectively enabling a lightweight version of a taker speed bump. We’ll d
