Will Prop AMMs Re-Centralize DeFi in the Trojan Pool?

The Rise of Proprietary AMMs on Solana: A Shift in DeFi Power Dynamics

Decentralized finance (DeFi) was once built on the idea of open, community-driven innovation. But on Solana (SOL), the landscape is rapidly evolving. Today, private proprietary automated market makers (AMMs) are dominating, extracting liquidity from public markets, offering sharper prices, and calling into question DeFi’s original promise of democratized finance.

While Solana’s high throughput, low fees, and composable infrastructure offer unique advantages, the growing dominance of vertically integrated, private AMMs may be shifting DeFi towards recentralization rather than decentralization.

Solana DeFi’s Power Shift: From Public Pools to Private Engines

Over the past year, Solana’s DeFi ecosystem has seen a major transformation. Emerging decentralized exchanges (DEXs) like SolFi, ZeroFi, Tessera, and HumidiFi are rapidly gaining market share—despite operating with little public branding or transparency.

Unlike traditional AMMs with passive liquidity pools (think Uniswap), these new proprietary AMMs are sophisticated trading engines. Built directly into Solana’s runtime, they offer ultra-low latency and tighter bid-ask spreads—especially for key trading pairs like SOL/stablecoins.

How Do Proprietary AMMs Work on Solana?

Most prop AMMs on Solana operate in the shadows. They lack public front-ends, documentation, or governance forums. Users can’t see order books or interact directly. Yet, their adoption is booming thanks to:

• Traditional-style quoting (bid/ask) instead of constant product curves

• Tight integration with Solana-native protocols like Phoenix and OpenBook v2

• Low-cost, on-chain quoting logic, allowing real-time price updates with minimal fees

These closed-source market makers are effectively bypassing the transparency that once defined DeFi, bringing high-frequency trading (HFT) logic on-chain.

Who Are the Major Players in Solana’s Prop AMM Ecosystem?

Lifinity (LFNTY) – The Transparent Pioneer

Launched in January 2022, Lifinity was the first oracle-based AMM on Solana. With a public front-end and its governance token ($LFNTY), Lifinity remains the most transparent of the proprietary AMMs. All liquidity is protocol-owned, with less reliance on aggregators than most competitors.

SolFi – Built by Ellipsis Labs

SolFi emerged from Ellipsis Labs, creators of Phoenix, a leading Solana order book protocol. Spearheaded by Eugene Chen and Jarry Xiao, SolFi launched in late 2024 and quickly became a key player in Solana’s liquidity wars.

HumidiFi, GoonFi, and ZeroFi – The New Liquidity Giants

Since its launch in June 2025, HumidiFi has overtaken SolFi, now commanding nearly 50% of the proprietary AMM market on Solana. Meanwhile, professional trading firms GoonFi and ZeroFi are rapidly expanding, creating an increasingly competitive and secretive prop AMM environment.

The Role of Solana Liquidity Aggregators

Liquidity aggregators like Jupiter and Titan are central to the growth of prop AMMs. Jupiter alone now processes over 50% of Solana’s swap volume. By routing trades to the best price pools—public or private—Jupiter blurs the line between DEXs and proprietary trading protocols.

This has made Jupiter a key gatekeeper for Solana DeFi liquidity, while giving integrated protocols preferential access to flow and sidelining less-connected competitors.

Efficiency vs. Centralization in Solana DeFi

While proprietary AMMs bring better execution and efficiency, they also introduce new risks:

• Reduced transparency due to lack of open data or governance

• Centralized control of liquidity by a few anonymous or pseudonymous players

• Fragmentation of markets across asset types and trading strategies

Retail traders may enjoy tighter spreads but rely heavily on invisible actors—similar to centralized exchanges. For many DeFi purists, this re-centralization undermines the movement’s original ethos.

The Decline of Passive Liquidity on Solana

Legacy models like Uniswap-style passive pools are under pressure. On Solana, these pools can’t compete with prop AMMs that dynamically refresh quotes, avoid MEV attacks, and minimize arbitrage risks.

The result? A structural shift in DeFi—one that mirrors traditional finance, where high-speed, closed-source firms dominate order flow.

Conclusion: The Future of DeFi on Solana

Solana is at the forefront of a DeFi transformation. Proprietary AMMs are redefining liquidity provision as a fast, competitive, and professional activity. This shift offers better prices and greater efficiency—but at the cost of openness and decentralization.

As DeFi evolves, the line between decentralized and centralized finance grows thinner. Solana’s technological strengths—speed, cost, and composability—may ironically be pulling it closer to the financial systems it once sought to disrupt.

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