Prop AMM Solana Explained: How Proprietary Market Makers Took Over
By Jorge Rodriguez — DeFi Protocols
How proprietary AMMs use real-time oracle updates to outprice public pools on Solana's most liquid pairs
The four structural conditions that make prop AMMs a Solana-native innovation not replicable on EVM
What prop AMM dominance means for passive LP yields and where active opportunities still exist
Introduction
Prop AMMs have quietly become the dominant liquidity infrastructure on Solana. In the second half of 2025, proprietary automated market makers captured over 60% of all SOL/USDC swap volume, peaking at 86% on a single day in July. Daily volumes across these venues consistently exceeded $1B over a rolling 60-day window, yet most DeFi users have never heard of them. That gap exists by design. Prop AMMs are intentionally opaque. There is no public frontend, no published pricing logic, and no way for retail participants to deposit capital. They are operated by professional market makers who encode their strategies directly into on-chain Solana programs and interact with the broader market exclusively through aggregator routing. This article explains what prop AMMs are, how they work, why they emerged on Solana and not on any other chain, and what their dominance means for DeFi users and liquidity providers. If you are tracking LP yields and comparing active opportunities on Solana, the [Lince Yield Tracker](https://yields.lince.finance/tracker) covers live rates across all major protocols.
What Is a Prop AMM?
A conventional AMM operates on a published pricing curve. When you swap via a [concentrated liquidity pool](/blog/defi-protocols/concentrated-liquidity-clmm) on [Orca](/tracker/solana/orca) or through a [DLMM pool](/blog/defi-protocols/dlmm-pools-explained) on any Solana DEX, the pricing logic is transparent and immutable. Anyone can inspect the pool state, calculate the expected output for a given input, and provide liquidity by depositing both sides of a pair. This is the foundational model that DeFi is built on. A prop AMM replaces the static curve with a dynamic one. The pricing parameters are controlled exclusively by the entity running the on-chain program. No one else can update them. No one else can provide capital. The pricing logic is a black box with no published interface, no user-facing documentation, and no way to inspect what is happening inside. The term proprietary refers to ownership of the strategy, not the underlying infrastructure. These venues operate closer in spirit to a traditional finance dark pool than to a conventional DEX. The market maker takes one side of every trade and updates quotes continuously to reflect real-time market conditions, rather than allowing price to emerge from passive reserve ratios. **Active vs passive pricing:** public AMMs price based on reserve ratios that shift as trades happen. Prop AMMs price based on actively managed, real-time signals that the market maker controls and never discloses.
How Prop AMMs Work
The mechanism centers on one core asymmetry: updating a price on-chain is far cheaper than executing a swap. On HumidiFi, a leading prop AMM, an oracle update costs 143 Compute Units (CUs). A typical [Jupiter](/tracker/solana/jupiter) swap consumes tens of thousands of CUs. This cost gap is what makes continuous, high-frequency repricing economically viable at scale. **The execution flow:** • The market maker maintains an on-chain program that holds liquidity and expresses a quote via a pricing curve with updatable parameters • The market maker pushes oracle price updates many times per second, continuously refreshing the price offered to incoming takers • When a swap is about to be processed, the market maker uses Jito's priority transaction auction to insert a fresh oracle update just ahead of the taker transaction in the same block • Jupiter's routing engine aggregates quotes from all available venues and routes each swap to the best available price automatically • The taker receives execution at near-real-time pricing, often at 0 to 0.5 basis points of slippage, competitive with major centralized exchange spreads The pricing logic is never disclosed. Prop AMMs operate without a public IDL (Interface Definition Language), without a user-facing frontend, and without any published documentation. This opacity is intentional: exposing the quoting strategy would allow competitors to model and eventually game it. There is no LP token. There is no deposit function for external capital. All liquidity comes from the market maker's own balance sheet, and all spread revenue accrues to the market maker alone. This is fundamentally different from public AMMs, where protocol fee income flows out to external liquidity providers. 
Why Prop AMMs Only Exist on Solana
This model has not been replicated on Ethereum or any EVM chain, despite significant attention from the DeFi research community. As documented by [Helius](https://www.helius.dev/blog/solanas-proprietary-amm-revolution) and [Figment](https://www.figment.io/insights/the-rise-of-proprietary-market-makers-on-solana/), four structural conditions make Solana uniquely suited to this approach. **High retail order flow.** Prop AMMs require a dense, continuous stream of natural swap activity to quote against profitably. Solana has one of the most active retail trading bases in DeFi, generating consistent, predictable two-sided flow. Without this baseline of natural activity, market makers cannot generate reliable returns from the bid-ask spread and the model breaks down. **Cheap, high-throughput computation.** Frequent oracle updates must be economically viable to run continuously. At 143 CUs per update on HumidiFi, repricing multiple times per second costs a fraction of a cent. On Ethereum, equivalent compute and gas costs would make this approach prohibitively expensive before accounting for base fee volatility or network congestion. **Compute Unit priority mechanics.** Solana's fee market lets transactions bid for priority execution through small Jito tips. Market makers exploit this by inserting oracle updates just ahead of incoming taker transactions within the same block. This cancel-priority mechanism has no direct analog on EVM chains, where block structure, mempool dynamics, and sequencer design operate fundamentally differently. **Jupiter aggregator dominance.** Jupiter routes roughly 40% or more of all Solana DEX volume through a single integration point. Once a prop AMM offers the tightest quote for a pair, Jupiter routes flow to it automatically. On EVM chains, volume is fragmented across Uniswap, 1inch, Paraswap, Matcha, and dozens of others. No single aggregator integration yields comparable reach, which fundamentally changes the economics of building and operating this type of venue.
The Key Prop AMM Players on Solana
As of late 2025, six prop AMMs account for the majority of proprietary market-making activity on Solana. All of them route almost entirely through Jupiter, and none have public frontends, published strategies, or retail deposit mechanisms. | Protocol | Aggregator-Sourced Volume | |----------|---------------------------| | GoonFi | 99.2% | | ZeroFi | 97.3% | | Orbic | 92.5% | | SolFi | 88.4% | | HumidiFi | Active, oracle cost leader | | Tessera | Active | The aggregator dependency numbers underscore how central Jupiter is to the model. GoonFi, ZeroFi, and Orbic derive virtually all of their volume from aggregator routing. Without that single integration point, their flow would collapse almost entirely. HumidiFi stands out for technical efficiency. Its 143 CU oracle update cost represents the performance ceiling the model has reached on Solana, and is over 1,000 times cheaper than a standard Jupiter swap. As [Solana.com documents](https://solana.com/news/understanding-proprietary-amms), prop AMMs achieve this by using predictive price feeds that update minimal on-chain data to continuously track real-time market prices at a fraction of the cost of a standard swap execution. 
What This Means for DeFi Users
For anyone executing swaps on Solana, prop AMMs are a net improvement. Tighter spreads, lower slippage, and near-real-time pricing deliver better execution than most public AMMs can match. Jupiter handles routing automatically, so users benefit without needing to know which venue filled their trade or how it priced the swap. For passive liquidity providers, the dynamics are more complex. As prop AMMs absorb a growing share of swap volume in high-liquidity pairs, the fee revenue available to passive pools compresses. An LP in a CLMM or DLMM earns fees only on the volume that routes through their specific pool. If professional venues are capturing 60 to 86% of SOL/USDC flow, the competitive opportunity for passive LPs in that pair narrows considerably. This does not make public LP strategies obsolete. Prop AMMs concentrate heavily in the most liquid, highest-volume pairs. Long-tail tokens, new trading pairs, and lower-volume assets continue to rely on public AMMs as their primary liquidity source. For high-volume pairs though, understanding [how to optimize your LP range in a CLMM](/blog/yield-strategies/how-to-optimize-lp-range-clmm) and targeting pools where passive capital still attracts meaningful volume matters more than it used to. If you want to monitor which Solana LP pools still offer competitive yield in this environment, the [Lince Yield Tracker](https://yields.lince.finance/tracker) lets you compare live rates across protocols and identify where passive capital still earns.
FAQ
### What is a prop AMM on Solana? A prop AMM (proprietary automated market maker) is a liquidity venue where a professional market maker continuously updates pricing in real time using on-chain Solana programs. Unlike public AMMs, the pricing logic is not public, retail users cannot provide liquidity, and all capital comes from the market maker's own balance sheet. ### How is a prop AMM different from Orca or Raydium? Public AMMs like Orca and Raydium use transparent pricing curves that anyone can read, audit, and provide liquidity to. Prop AMMs use actively managed pricing with parameters controlled exclusively by the market maker. There is no published logic, no frontend, and no external LP access of any kind. ### Can I earn yield by providing liquidity to a prop AMM? No. All capital in a prop AMM is provided by the market maker itself. There is no deposit mechanism for external participants, no LP token to receive, and no yield to earn. These venues are not a retail product and do not have any user-facing interface. ### Why don't prop AMMs exist on Ethereum? The model requires cheap, high-frequency oracle updates, cancel-priority execution mechanics, and a dominant aggregator to source consistent volume. Ethereum's compute costs make frequent repricing expensive, and swap volume is fragmented across many aggregators, making the single-integration economics unworkable. ### How do prop AMMs get their trading volume? Almost all prop AMM volume comes through Jupiter's routing engine. Jupiter aggregates quotes from all available venues and routes each swap to the best price automatically. Once a prop AMM offers the tightest quote for a pair, Jupiter routes volume to it without any additional action from the market maker or the user. ### Do prop AMMs hurt passive liquidity providers? They create volume competition in the most liquid pairs on Solana. As prop AMMs capture more of the SOL/USDC flow, passive LPs in those pools earn fewer fees on that volume. Passive LPs are better positioned in pairs and pools where professional market makers are not yet dominant.
Conclusion
Prop AMMs are not a passing experiment. They are a structural feature of how Solana's on-chain liquidity now works, made possible by four conditions that no other chain currently meets: retail order flow density, cheap computation, priority execution mechanics, and aggregator dominance through Jupiter. Over 60% of SOL/USDC volume runs through them, with daily totals consistently above $1B. For DeFi users, this means better swap execution as a baseline. For liquidity providers, it means the competitive landscape in high-volume pairs has shifted permanently. Understanding which pools still attract meaningful volume and which have ceded flow to professional market makers is now part of any serious LP strategy on Solana. The [Lince Yield Tracker](https://yields.lince.finance/tracker) lets you monitor live LP yields and compare active rates across Solana protocols, so you can position passive capital where it still earns in this evolving market.