Professional Market-Maker AMMs Reshape DEX Liquidity Landscape
TREE NEWS reports: A new report from DWF Ventures reveals that Professional Market-Maker AMMs (PropAMMs) now account for roughly 15% to 27% of daily on-chain DEX trading volume, with peak days approaching 30%. The model, which blends active market-making strategies with automated liquidity pools, is rapidly gaining share—and roughly 90% of that volume is concentrated on Solana.
What PropAMMs Do Differently
Traditional AMMs like Uniswap v2 rely on passive liquidity providers who deposit assets into pools and accept impermanent loss. PropAMMs flip that model: professional market makers set dynamic quotes, manage inventory actively, and often internalize order flow. This results in tighter spreads, lower slippage for takers, and more capital-efficient liquidity deployment.
Solana’s high-throughput, low-fee environment makes it a natural home for these strategies. Protocols such as Phoenix, Drift, and various Jupiter-integrated market makers have leaned into this design, helping Solana cement its position as the leading chain for on-chain derivatives and spot trading activity.
Why This Matters for DeFi
- Competitive pressure on passive AMMs: If PropAMMs continue to grow, passive liquidity pools may face shrinking volume share and fee revenue, forcing them to innovate or adopt hybrid models.
- Centralization concerns: Professional market makers are often few in number. High concentration could introduce new counterparty and operational risks into DeFi’s liquidity layer.
- Cross-chain expansion: With 90% of volume on Solana, the question is whether PropAMMs can replicate that success on Ethereum L2s, Base, or emerging chains.
The Road Ahead
PropAMMs represent a maturation of DeFi liquidity—moving from purely algorithmic pools toward hybrid structures that resemble traditional market-making desks. If the trend continues, expect more protocols to adopt hybrid designs, more regulatory scrutiny around market-maker concentration, and a continued battle for on-chain order flow. Solana’s dominance in this niche is a signal that execution speed and low costs remain decisive competitive advantages in crypto trading infrastructure.
