Decentralized finance once billed itself as a rebellion against financial elites. On Solana, the revolution is looking more like a surrender. Proprietary automated market makers (prop AMMs) – privately run liquidity engines operating without fanfare – are quietly capturing flow. They offer slick execution and narrow spreads, but at the cost of transparency and community control.

Opaque operators

The original DeFi model was open concept. Liquidity pools were public and anyone could deposit tokens and earn fees. Proprietary AMMs break from that egalitarian ideal.  Instead of crowd-sourced capital chasing arbitrage, they encode market-making strategies directly into Solana programs. These pools behave like private trading desks: controlled, optimized and tuned for speed. Quoting happens inside Solana's runtime rather than on external servers, cutting latency and squeezing out passive liquidity providers.

This architecture suits Solana's strengths -- high throughput, composability and negligible fees. It has already reshaped trading in stablecoins, where proprietary pools now dominate execution.

A Quiet Power Base

Prop AMMs' rise has gone largely unnoticed because they shun publicity. Protocols with names like SolFi, ZeroFi and HumidiFi run without front-ends, governance forums or even documentation. Their operators are anonymous. Their code is closed. They are not building communities; they are running trading infrastructure.

By contrast, Solana's public order books such as Phoenix and OpenBook v2 require every strategic adjustment to be pushed through the blockchain, often competing for priority fees. Proprietary AMMs sidestep this friction entirely. They internalize strategy and refresh quotes continuously at marginal cost -- a clear advantage.

A Game for Professionals Only

Running such infrastructure is both technically demanding and capital-intensive. Only a handful of sophisticated players, many linked to market-making firms, have the expertise to participate. Lifinity was the first mover in 2022, pioneering on-chain oracle-based strategies. SolFi, launched by the operators of Phoenix, triggered the recent surge. New entrants like HumidiFi and GoonFi have since piled in, trading market share with the aggression of high-frequency firms.

This is no longer the domain of hobbyist liquidity providers. It is a professionalized race for flow.

Aggregators Hold the Keys

Closed though they are, proprietary AMMs have thrived thanks to liquidity aggregators. Platforms such as Jupiter and Titan route trades across Solana, automatically selecting the best quotes. Jupiter alone handles more than half of all swap volume.

This integration gives prop AMMs visibility without the bother of retail-facing front-ends. From the user's perspective, there is little difference between swapping on a public DEX or through a private AMM: Jupiter pipes orders wherever the price looks best. Aggregators have thus become Solana's de facto gatekeepers. Protocols included in their routing enjoy privileged access; those excluded risk irrelevance.

Efficiency Versus Ideology

Specialization has already set in. Some AMMs dominate stable-to-stable swaps; others focus on SOL pairs or long-tail tokens. The result is sharper pricing, deeper liquidity -- and increasing fragmentation. The market resembles traditional finance, where specialist firms carve out micro-domains and defend them fiercely.

This shift raises uncomfortable questions. Liquidity may be abundant and pricing more efficient, but control is concentrating amongst a handful of opaque actors with unclear incentives. DeFi's founding promise -- open access, transparent rules -- is giving way to a regime closer to high-frequency trading than community finance.

The Inevitable Logic of Speed

Solana's success in attracting these players is not accidental. Its architecture allows trading logic to live on-chain without performance collapse. That makes it the first chain where professional market-making can operate natively, not as an off-chain add-on. What is emerging is not a failure of DeFi, but its evolution into something recognizably financial: fast, efficient and secretive.

Whether that represents progress or betrayal depends on one's priors. For those who value execution above ideology, the rise of proprietary AMMs is a feature. For DeFi purists, it looks uncomfortably like history repeating -- just with new gatekeepers and different jargon.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.