DeFi has gone a long stretch without producing a new narrative that feels genuinely fresh. Over the past year, one of the few ideas to break through among traders and researchers has been PropAMM.
The term still sits well outside mainstream user awareness. But according to ChainCatcher, it has become a recurring topic among professional market participants. Former Multicoin Capital co-founder and current Forward Industries chairman Kyle Samani said in a post several months ago that PropAMM is one of the most important innovations in market microstructure in recent years, and he expects the model to become the main on-chain trading mechanism this year across spot, perpetuals and even prediction markets. ETHlab has also said publicly that it views PropAMM as one of its top research priorities.
On Solana, the main battleground for the model, PropAMM venues led by Bisonfi, HumidiFi and SolFi at one point accounted for 70% of the entire DEX market this year. Existing DeFi protocols including Haedal, LFJ and Genius have also rolled out PropAMM products on Ethereum, Base and BNB Chian.
Jump Crypto said that in March 2026, leading Solana PropAMMs processed $19.87 billion in SOL/USDC and SOL/USDT volume, close to the combined volume in comparable dollar-denominated pairs across Binance, Coinbase, OKX and Bybit.
What makes the shift unusual is how invisible it remains to most users. Many native PropAMM projects do not maintain an official website, do not offer detailed documentation and in some cases have little more than an X account that rarely posts. Users trading through aggregators such as Jupiter, 0x and LFJ may only notice lower slippage and better execution, without realizing that the quotes are no longer coming from a traditional AMM pool but from a closed professional market-making engine.
That is also why PropAMM deserves attention. It may not alter DeFi’s value narrative in the same way AMMs once did, but it is changing how on-chain trading feels in practice.
What PropAMM is trying to fix
To understand PropAMM, it helps to start with the weaknesses of the traditional AMM model.
Protocols such as Uniswap, Curve, Raydium and Orca place liquidity into open pools, with pricing determined by a fixed formula or a price curve. Anyone can provide liquidity. Anyone can trade. The rules are transparent, open and composable. That structure was one of DeFi’s most important breakthroughs.
It also carries obvious limits. Traditional AMMs are slower to update prices, less efficient in how they deploy capital and more exposed to being picked off by sophisticated traders through MEV. If prices move first on centralized exchanges while an on-chain pool has not yet adjusted, arbitrage bots can trade against the stale pool and pull it back into line. In that process, ordinary liquidity providers often absorb impermanent loss, while traders can end up with wider slippage and weaker fills.
PropAMM takes a different route. Instead of asking a broad base of retail LPs to deposit funds into a pool and wait for order flow, a professional market-making team uses its own balance sheet and proprietary algorithms to stream executable bids and offers directly on-chain.
As the report defines it, PropAMM is an on-chain market-making program that provides executable bid and ask prices for a trading pair. Rather than leaning mainly on fixed curves like a passive AMM, it can continuously adjust prices and liquidity behavior using proprietary market-making logic.
In simpler terms, a traditional AMM behaves more like a vending machine with prices set by a public formula. A PropAMM behaves more like a professional dealing desk, with prices changing in response to broader market conditions, inventory, risk and observed order flow.
The capital is also positioned differently. Instead of spreading liquidity across a broad range of prices and waiting for low-probability trades, PropAMM aims to concentrate liquidity as close as possible to where the next trade is actually likely to happen. That is the core of its capital-efficiency argument.
Kevin, founder of HumidiFi, said in an interview that the platform uses its own inventory and predictive pricing models to generate quotes. While liquidity in a traditional AMM sits passively inside a pool, PropAMM updates prices multiple times within each block and, on current Solana infrastructure, can get close to one update every 50 milliseconds.
Kevin also said HumidiFi can often support $500 million to $1 billion in daily volume with about $8 million in inventory. In his description, the model pushes Uniswap v3-style concentrated liquidity to the limit: all liquidity is dedicated to the next trade rather than left idle far away from the current price.
How the model took shape on Solana
Lifinity is widely seen as the first project to introduce a proprietary AMM design. It launched on Solana in January 2022 and described itself at the time as an oracle-based AMM, using oracle prices to update quotes more actively in an effort to reduce impermanent loss and defend against toxic flow. The project is commonly treated as an early prototype of the PropAMM approach.
Even so, the term “PropAMM” did not become widely used until a newer wave of projects broke out on Solana starting in 2024. The earliest core group in that phase included SolFi, ZeroFi and Obric.
By 2025, another set of projects had arrived, including HumidiFi, GoonFi and Tessera V, which was launched by Wintermute. HumidiFi later surged ahead and at one point became the largest PropAMM by trading volume on Solana, accounting for nearly 50% of all PropAMM volume.
In December 2025, SOL treasury company Forward Industries announced BisonFi, its in-house AMM platform. That launch changed the competitive picture again, with BisonFi overtaking HumidiFi to become the PropAMM with the largest market share on Solana.
RootData counts 12 PropAMM projects in the market today. The report adds that because many projects have not formally disclosed themselves, the potential total is expected to exceed 20. More legacy DeFi protocols are also moving to adopt PropAMM mechanisms.
The efficiency case and the pushback
Uniswap founder Hayden Adams, whose protocol represents the main competing model, has taken a measured view. He argues that PropAMM’s efficiency comes from external price sources. In other words, the structure assumes that price discovery happens somewhere else first and is then imported on-chain. Once a market becomes the dominant venue in its own right, oracle relevance fades. By contrast, Adams said, AMMs are more ambitious because they assume price discovery happens directly in the market itself.
That gets to the central dispute around PropAMM: is it making DeFi stronger, or is it turning DeFi into an execution layer for centralized or external price discovery?
In practice, PropAMM quotes usually depend on off-platform market prices, private models and professional inventory management. The model can be more user-friendly because execution may improve, but it is not friendly to ordinary LPs, most of whom cannot participate directly in market making. It raises execution quality while reducing strategy transparency. It keeps more order flow on-chain while concentrating liquidity provision back into the hands of a smaller professional class.
A Solana article cited in the report said the model still faces a list of unresolved issues. Quote updates depend on whether the block leader includes transactions in time. Updating quotes costs money. Integration with aggregators is not fully permissionless. Most code remains closed source. Users cannot easily verify whether they received the best possible execution. And current PropAMM designs do not support genuinely open liquidity deposits.
In March 2026, DEX aggregator 0x published a report saying some PropAMMs on Base showed systemic quote fraud. According to the research, operators used Base’s Flashblock architecture to post highly attractive prices during roughly the final 200 milliseconds of a block, drawing in aggregator routing, then immediately worsened those prices at the start of the next block.
0x said the behavior typically leaves traders with an extra 5 to 10 basis points in losses. At $1.1 billion in monthly volume, a single liquidity source could cost users an additional $500,000 a month.
The finding points to a darker side of the model. When liquidity is concentrated among a small number of closed-source professional operators, the same information asymmetry that improves execution can also be used against users.
Why PropAMM matters
PropAMM is not a category-defining breakthrough on the order of flash loans or the original AMM design. It does not rewrite the base grammar of DeFi, and most users are unlikely to experience it as an entirely new product category.
Still, it may turn out to be a necessary microstructure upgrade if DeFi is going to move closer to mass adoption.
Most users do not care whether the engine behind a trade is x*y=k, concentrated liquidity or a proprietary quoting model from a professional market maker. They care about whether the price is competitive, whether slippage is low, whether execution is fast and whether they are less exposed to MEV and stale pricing.
PropAMM’s answer is blunt: better trading may require DeFi to accept more professionalized, more closed and more strategy-driven liquidity.
DEX competition may be judged differently
DEXs were once measured mainly by TVL, number of pairs and the scale of liquidity incentives. The more important benchmark ahead may be execution quality. For the same SOL/USDC or ETH/USDC trade, the venue that delivers the better fill is more likely to win aggregator routing and user order flow.
Aggregators gain even more influence
PropAMMs often do not interface directly with retail users. They rely on aggregators such as Jupiter, 0x and LFJ for traffic. Whoever controls order routing can decide which forms of liquidity receive flow. In that sense, DeFi is moving from competition between pools to competition between routing systems.
The role of ordinary LPs could shrink
Traditional AMMs remain hard to replace in long-tail assets, early-stage projects and community tokens. But on major trading pairs, ordinary LPs will have a hard time competing with specialized market makers. According to the report, users may end up participating in yields more indirectly through vaults, deposit products, protocol tokens or open allocations from market makers rather than by becoming LPs themselves.
DeFi could look more like traditional finance
At its core, PropAMM brings professional market making, inventory management, low-latency quoting, risk controls and private strategy on-chain. That can make on-chain trading more efficient. It can also make DeFi look more like a financial market run by professional intermediaries.
Traditional finance relies on market makers because complex markets need specialized risk takers. Early DeFi held out the idea that code and open pools could replace nearly everything. What the market has shown instead is that in fast, volatile and highly competitive trading environments, specialization still matters.
Seen from that angle, PropAMM carries a sense of retrenchment. It weakens the early DeFi ideal that anyone can become an LP. At the same time, it may be one of the clearest paths toward giving on-chain markets execution quality that can actually compete with centralized exchanges.