PropAMMs: Are Traditional AMMs Being Replaced?

Key Takeaways

• PropAMMs have captured a major share of trading volume, going up to 30% of daily totals, and over 90% of SOL-stablecoin flow.
• Solana’s architecture puts it ahead in propAMM adoption. Low-cost, frequent price updates, and mid-slot repricing give market makers a structural edge that cannot be fully replicated on Ethereum.
• Traditional AMMs still dominate long-tail assets, especially newly-listed assets. Permissionless listings cannot be replicated by propAMMs.
• Stablecoins are a genuine split, propAMMs have taken close to 30% of Solana stablecoin volume, but traditional AMMs dominate Ethereum
• RWAs are likely to divide along the same lines as crypto-native assets

With the emergence and success of proprietary AMMs (propAMMs), traditional AMM designs have become a frequent subject of comparison, often criticised for their inefficiencies and shortcomings. On paper, propAMMs look like the stronger model, but on-chain evidence tells a more nuanced story, that AMMs still retain their share of the market and are far from being replaced.

In this report, we look at the current state of propAMMs, how adoption differs across ecosystems, and where they have proven to be effective. We also dive into the design advantages of traditional AMMs and how they remain relevant, and discuss which model is better positioned for the near future.

PropAMMs, Then & Now

Early renditions of the propAMM model trace back to 2022, pioneered by Lifinity, an AMM that priced off live feeds rather than passive curves. The next generation arrived in the second half of 2024, with SolFi, Obric, and ZeroFi all launching within months of each other. This trio set the template for today's propAMMs, featuring proprietary pricing models, closed pools with no public deposits, and no retail-facing front-end, surfacing instead through aggregators' routing tables. By early 2025, they were collectively routing 35–60% of Jupiter's daily volume.

The emergence of such alternative models was largely driven by a structural flaw associated with AMMs, where passive liquidity providers were consistently on the losing end. While traditional AMMs like Uniswap sought to solve the problem while sticking within the constant product curve paradigm, competitors looked outward, incorporating actively-managed pricing on-chain instead. PropAMMs are the maturation of that lineage, where order flow is routed to professional market makers who run their own pricing models and inventory systems off-chain, and proactively publish quotes on-chain. At the moment, propAMMs make up anywhere from 15-27% of daily on-chain DEX volume. 

Solana Dominance

What began as a Solana-based development has since expanded into an entire category of exchanges across chains. Despite this, total propAMM volume is still overwhelmingly concentrated on Solana (~90%), with the remainder split across Ethereum, Base, BNB Chain, and others. 

It is worth noting that while Ethereum lags in volume share, there has been considerable growth. In the last week of August, the chain posted a daily high in volumes, reaching just shy of $300m in total swaps facilitated by propAMMs like FermiSwap, and Metric. Cumulative volume has grown exponentially in the past few months, from just under $7m at the start of June to $4.3b this month.

This concentration on Solana however, is not by accident. PropAMMs rely on being able to update price quotes cheaply and reliably, according to changes in inventory and reference prices. This is especially key in preventing losses for market makers, since stale quotes can be taken advantage of by arbitrageurs. Solana’s lower costs vs other blockchains means more frequent updates to quotes, fresher prices, and overall higher efficiency for market makers. 

At the same time, Solana’s continuous architecture allows for repricing mid-slot as blocks are being built, immediately affecting trades that come after. On the other hand, Ethereum slot times are longer (12s), and market makers are confined to updating just once per block. This has made propAMMs riskier and more expensive to run on Ethereum and other EVMs, which has been a major factor in stalling adoption.

Where the Edge Lies

While the cost and frequency advantage explains where propAMMs operate better at a blockchain level, there are also specific asset pairs where its effectiveness is more visible.

The clearest win for propAMMs has been on larger cap volatile asset-stablecoin pairs such as SOL-USDC and ETH-USDC. For reference, over 90% of total daily SOL-stablecoin volume routed by Jupiter is now processed by propAMMs.

Traditional AMMs price based on a static curve and only reprice after a trade alters pool reserves, so in fast markets where volatility is high, pool prices may lag outside sources until arbitrageurs correct imbalances. Because of this, liquidity providers are exposed to potential losses from consistently trading at these stale prices, otherwise known as loss-versus-rebalancing (LVR) costs. While insignificant in normal market conditions, these can compound during periods of high volatility, offsetting or even exceeding fee income.

On the other hand, propAMMs reverse this sequence. An oracle feed or an off-chain proprietary valuation model updates prices on-chain first, which venues then quote against, and since update costs are low relative to swap costs, quotes can remain fresh throughout periods of volatility, minimizing toxic flow and providing tight spreads. Jump Crypto’s analysis of the SOL-USDC and SOL-USDT markets across the top cohort of propAMMs on Solana shows just how effective propAMMs have been from a pricing perspective. The median propAMM fill executed just 0.72bps from the best available price across major CEXs, 1.85 bps cheaper than even the lowest institutional CEX fee tier, with over 90% of fills (both by count and by notional) beating the cheapest institutional tier, and above 99% beating standard retail CEX fees. 

It is worth noting however, that this edge remains limited to assets with a reliable external reference price, or with enough liquidity and trading history to support an accurate pricing model. On illiquid or newly-listed assets where no reference exists, the advantage flips.

Traditional AMMs Remain Relevant

While the static price curves that traditional AMMs utilize have their fair share drawbacks, it is also what gives traditional AMMs their own edge. This design enables markets to be set up permissionlessly, for any new token, with zero external infrastructure required. No need for oracles, pricing models, or even a market maker being willing to take the other sides of trades. This is especially relevant and advantageous for long-tail assets and newer tokens, providing a key venue for them to be traded and speculated on. In a landscape where most liquid pairs migrate to propAMMs, thousands of newly released memecoins and tokens are still being routed daily to traditional AMMs through launchpads.

At the same time, stablecoin pairs remain largely dominated by traditional AMMs. For stablecoin swaps, liquidity depth and tight spreads are priorities to users, since neither asset is expected to move significantly against the other. In this case, the entire value proposition of the venue will come down to how little slippage a trader pays to move size. With traditional AMMs being available for public LP deposits, liquidity has been much deeper, allowing them to facilitate much larger traders without much price impact.

While propAMMs have managed to capture close to 30% of total daily stablecoin swap volume on Solana, traditional AMMs remain the key player. This dominance is much more defined on Ethereum, where traditional AMMs like Uniswap and Curve facilitate the majority of stablecoin swaps. This can also be attributed to purpose-built models that traditional AMMs have adopted to optimize for stablecoin swaps, including Curve’s StableSwap.

RWAs and The Future

In an on-chain landscape where an increasing number of RWAs are being onboarded, which model is best positioned to capture trading volume? It is likely that tokenized RWAs are split similarly as the other assets discussed in this report. Treasuries, commodities, and large-cap equities are likely to require deeper liquidity and tighter quotes for funds and larger institutional participants. Jump’s partnership with Securitize and Jupiter in May already corroborates this view. 

Despite this, there will likely be room for traditional AMMs. Smaller and newer RWAs that are onboarded on-chain will still require liquidity venues that list without inventory or an oracle price feed. This will only continue to increase as interest in other long-tail RWAs grows.  Another interesting angle would be different derivatives of the same asset that trade closely or are pegged to the same underlying, similar to how stablecoin pairs work. This is especially relevant with how multiple issuers are increasingly tokenizing the same underlying asset across competing platforms.

Conclusion

PropAMMs have not retired traditional AMMs. Instead, they have taken a slice of the market where live reference prices and a professional book beats static price curves. Jupiter now sends the most SOL-stablecoin flow through propAMMs, users get best prices trading these pairs on-chain versus on a CEX, and the same logic is just starting to show up in certain RWAs. While this level of adoption is limited to Solana, we can already see efforts in replicating this model on Ethereum and its L2s. 

Permissionless listings remain the biggest value proposition of traditional AMMs, especially in an industry driven by not just speculative assets, but a large influx of new tokens being launched on the daily. Neither design is being replaced, each model has inherited markets they were suited to solve. Whether this balance shifts in the future will depend on where trading volume gathers, and the type of assets traded.