PropAMMs Dominate On-Chain DEX Volume as Solana Surpasses Ethereum
Proprietary automated market makers (AMMs) are increasingly dominating on-chain decentralized exchange (DEX) volume, accounting for as much as 30% of daily activity. This shift is particularly pronounced on Solana, where these closed liquidity pools handle over 90% of SOL-stablecoin flow.
The research from DWF Ventures found that propAMMs rely on professional trading firms managing pricing and inventory off-pool, then posting quotes on-chain. In contrast, traditional AMMs rely on static pricing curves and public liquidity provision.
Solana's network design is seen as a key factor in the success of propAMMs, allowing for cheap and frequent quote updates to avoid stale pricing. However, DWF Ventures noted that Ethereum's longer block times make it more difficult for market makers to update their quotes in real-time, limiting the growth of propAMMs on this network.