➥ Why Prop AMMs Are Overtaking Traditional AMMs on Solana Traditional AMMs struggle with stale prices, wide spreads, and high slippage when markets move quickly. Prop AMMs fix this with fast oracle updates and tight quotes from professional market makers. Will Prop AMMs potentially taking over traditional AMMs in 2026? Let’s break it down 🧵 — — — ► What are Prop AMMs? Prop AMMs are private market-making programs on @solana that manage their own liquidity, update prices with oracles, and provide tight spreads through fast, automated pricing. ➤ How Prop AMMs Are Different From Traditional AMMs Traditional AMMs depend on passive liquidity, which slows price updates and widens spreads. Prop AMMs improve this with: ▸ Faster updates with multiple price refreshes per second ▸ Very low cost, with oracle updates near 143 CUs ▸ Tight spreads, often 0 to 5 bps on $SOL and $USDC ▸ Strong market share across major Solana pairs These advantages come from active pricing and direct control over inventory. — ► How Prop AMMs Work Prop AMMs follow a simple loop to keep prices near fair value: ❶ Off-chain engines compute fair value using CEX and oracle data ❷ Oracle updates are pushed on-chain many times per second ❸ The liquidity curve moves to the new fair value ❹ Aggregators direct trades to the best quote ❺ The AMM settles the trade from its own vault This delivers tight spreads, low slippage, and better protection against toxic flow. — ► Why They Emerged on Solana Prop AMMs thrive on Solana because the network enables high-frequency pricing: ▸ Cheap compute, with oracle updates near 143 CUs ▸ High throughput for constant quote refreshes ▸ Priority auctions that let small CU updates land ahead of takers ▸ Concentrated retail flow routed efficiently through @JupiterExchange These conditions create a market environment few chains can match. — ► How Prop AMMs Are Dominating Solana Volumes Prop AMMs now command major Solana flow: ▸ 40–60% of total DEX volume ▸ Over 60% of SOL and USDC volume, peaking at 86% ▸ Daily flow often above $1B ▸ HumidiFi reaching a recorded $13.5B peak Their tight spreads and consistent execution make them the preferred route for large and small trades. — ► Main Players (as of late 2025) A mix of leading firms and anonymous teams now drive most Prop AMM liquidity on Solana. ▸ @humidifi → ~47% share with extremely cheap, high-speed oracle updates ▸ @SolFiAMM → Early leader built by the Phoenix team with strong microstructure design ▸ @tessera_v → Wintermute’s venue optimized for large, institutional-size trades ▸ Zero Fi → High-frequency quoting and ~97% flow coming from Jupiter ▸ @poor_obric → Multi-chain AMM with publicly analyzed execution logic ▸ GoonFi → Highly aggregator-dependent with ~99% Jupiter flow ▸ @Lifinity_io → First oracle-based AMM with protocol-owned liquidity ▸ BisonFi → New entrant focused on institutional strategies — ► Why This Matters Prop AMMs matter because they update prices instantly and at low cost, avoiding the heavy compute burden of traditional order book updates. This lets market makers keep spreads tight, reduce slippage, avoid toxic flow, and maintain consistent execution quality that public AMMs cannot match. For traders, execution often equals or beats CEX levels, and large swaps stay stable through Jupiter routing. At this pace, Prop AMMs may not replace every AMM, but they are positioned to lead major pairs in 2026 where active pricing outperforms passive liquidity.

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