<\/p>\n
Almost half of Jupiter\u2019s trading volume is routed through proprietary AMMs, highlighting growing centralization on Solana\u2019s top DEX aggregator.<\/p>\n
Jupiter<\/a>, the largest decentralized exchange (DEX) aggregator on the Solana<\/a> blockchain with over $2.5 billion in total value locked (TVL), is routing nearly half of its trading volume through proprietary automated market makers (AMMs<\/a>), according to Delphi Digital analyst 0x_Arcana.<\/p>\n In an X post<\/a> on July 31, the analyst revealed that proprietary AMMs, such as SolFi, ZeroFi, and Obric, have rapidly gained market share in the past six months despite being closed-source, raising questions about increasing centralization in the Solana ecosystem.<\/p>\n \u201cOver 40% of all trading volume on Jupiter today is routed through prop AMMs like SolFi, ZeroFi, and Obric,\u201d 0x_Arcana wrote.<\/p>\n Data from Dune Analytics shows<\/a> SolFi handles a quarter of all Jupiter trading volume. ZeroFi follows closely with 22%, while Meteora accounts for around 10%.<\/p>\n <\/p>\n <\/a><\/p>\n Unlike traditional AMMs \u2014 which are fully open and transparent on-chain \u2014 proprietary AMMs like SolFi combine private, off-chain price quotes with on-chain trade execution. They quote prices privately, rely on vault-based liquidity, and execute trades exclusively through aggregators without public frontends.<\/p>\n 0x_Arcana points out that this shift may create a more efficient market but moves away from the transparent, permissionless style of earlier AMMs. Traders seem to care more about better prices and execution than platforms\u2019 transparency, which is helping proprietary AMMs gain market share.<\/p>\n \u201cWe could see a bifurcated market structure – on one end sophisticated venues dominating volume on Jupiter, and on the other, V2 style pools like Raydium capturing the tail-end of assets,\u201d 0x_Arcana wrote.<\/p>\n Historically, AMMs provided a democratic way for users to supply liquidity but struggled with issues like capital inefficiency. At the same time, their public nature exposed traders and liquidity providers to risks such as frontrunning and maximal extractable value<\/a>, also known as MEV.<\/p>\n Proprietary AMMs address these problems by combining on-chain trade execution with off-chain pricing and private liquidity management. And yet, even though this approach can improve market efficiency, it also raises centralization concerns, as liquidity and order flow become concentrated with a small number of closed-source entities.<\/p>\nImproved Market Efficiency<\/h2>\n
Centralization Risks<\/h2>\n