The Evolution of Solana's DEX Landscape: Prop AMMs, Token Models, and the Rise of Onchain Equities

The Solana ecosystem stands at a fascinating inflection point as we close out 2024 and look toward 2025. The decentralized exchange landscape is undergoing a fundamental transformation, driven by the emergence of proprietary automated market makers (prop AMMs), new token issuance models, and the nascent but growing market for tokenized equities. In the final roundup episode of the year, Lightspeed hosts Danny and Dan Smith, along with researcher Carlos, dissected these interconnected trends and what they mean for the future of Solana's DeFi infrastructure.

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The Bifurcation of DEX Dominance on Solana

The Solana DEX landscape is experiencing a significant structural shift that will increasingly separate winners from losers based on asset maturity and trading strategies. According to Carlos, DEX dominance will bifurcate along clear lines: prop AMMs will dominate trading of mature, short-tail assets like SOL/USDC, while traditional AMM liquidity will continue to serve the long tail of newer, less established tokens. This division creates entirely different competitive dynamics and winning strategies for each category of decentralized exchange.

The key insight here is that order flow for prop AMMs primarily comes from aggregators, which means these sophisticated trading venues must compete relentlessly on execution quality. This stands in stark contrast to traditional AMMs, where liquidity depth and token availability matter more than microsecond-level execution improvements. The strategic implications of this divide are profound, forcing DEX operators to make fundamental choices about which market segment they want to serve and how they will build competitive advantages in that space.

Horizontal Integration: The Prop AMM Advantage

Prop AMMs on Solana are gaining significant advantages through horizontal integration across the infrastructure stack. The prime example is Humidify, developed by the Temporal team, which benefits from tight integration with Nosami (a transaction landing service) and Harmonic (a block building system competing with Jito). This horizontal integration allows Humidify to update its oracles approximately three times per second with remarkable consistency, a capability that directly translates into tighter spreads and better execution for traders.

Dan Smith shared detailed data on oracle update patterns across different prop AMM implementations. Humidify's update frequency of three times per second represents a significant outlier compared to other prop AMMs, which tend to update less frequently. This aggressive oracle update strategy enables Humidify to quote consistently lower spreads across various trade sizes, from $1,000 to $1,000,000 purchases. The success rate of these oracle updates hovers at high percentages, with failures typically occurring due to pricing function conditions rather than infrastructure issues.

The cost of this aggressive updating strategy is substantial. According to the data presented, Humidify's USDC pools have collectively paid over $1 million in transaction fees and Jito tips to execute oracle updates over their lifetime. This represents a significant operational expense that only makes sense if the trading volume and spread capture justify the infrastructure investment. The economics here reveal that prop AMMs are engaged in an arms race where infrastructure quality directly determines market share.

The Volume and Spread Dynamics of Prop AMMs

The relationship between spread and trade size across different DEX venues reveals important insights about market structure on Solana. Dan presented data showing that Humidify consistently offers the lowest spreads across nearly all trade size buckets, ranging from approximately half a basis point to 60 basis points depending on trade size. This consistency in execution quality explains why a significant portion of arbitrage activity flows through Humidify.

"One thing to flag here with the methodology is it basically looks for you need a purchase and a sale to occur within the same block. That's definitely not perfect," Dan explained, noting the limitations of on-chain spread analysis. The methodology undersamples because not every block contains trades in both directions, and it assumes bid and ask prices remain constant throughout the block—an assumption that breaks down when oracle updates occur multiple times per second.

Despite these measurement challenges, the directional findings are clear: prop AMMs that invest in superior infrastructure and faster oracle updates capture more volume and can quote tighter spreads. The arbitrage community recognizes this, routing their execution through venues that minimize slippage and maximize capture opportunities. This creates a virtuous cycle where better execution attracts more flow, which justifies further infrastructure investment.

Traditional AMMs and the Imperative of Vertical Integration

While prop AMMs benefit from horizontal integration across infrastructure, traditional AMMs face a different strategic imperative: vertical integration into token issuance. Carlos argued forcefully that traditional AMMs without control over the token issuance layer "risk fading into irrelevance." The logic is straightforward—if you cannot compete on execution quality against prop AMMs for mature assets, you must compete on distribution by owning the source of new token creation.

The paradigm shift became evident when Pump.fun launched its own AMM and redirected graduated coins away from Raydium. "When they redirected graduated coins towards their own AMM, we saw that Raydium lost its largest source of volume, and it hasn't recovered ever since," Carlos observed. This represents a fundamental change in how DEX moats are built and defended on Solana.

The winners in the traditional AMM category will increasingly be viewed not as decentralized exchanges at all, but rather as token issuance platforms. Carlos identified two main models emerging: the high-velocity memecoin launchpad model (exemplified by Pump.fun) and the ICO platform model (exemplified by Metadow). In both cases, the AMM component serves primarily to monetize token launches rather than to compete for organic trading volume against prop AMMs.

Metadow's Future Key AMM: A Case Study in Vertical Integration

Metadow represents perhaps the clearest example of successful vertical integration between token issuance and AMM functionality on Solana. The platform's Future Key AMM receives direct routing of tokens launched through Metadow's ICO platform, creating a captive source of trading volume that cannot be easily competed away by other DEXs. The token economics enforce this through contract-level restrictions that initially limit where newly launched tokens can trade.

The current Future Key AMM design is relatively vanilla in its mechanics, but the simplicity may be precisely the right approach. "The design space is still quite open. I think they do have the opportunity to experiment a little bit on that side of things, but sort of the simplicity is a bit of the beauty right now as well," Dan noted. This restraint allows Metadow to focus on its core value proposition—being the preeminent platform for token launches—while maintaining a reliable monetization engine.

Volume patterns on Metadow reveal important dynamics about token lifecycle economics. The platform generates the most revenue and volume on day one after an ICO, with activity tapering significantly thereafter. This means Metadow's moat depends on maintaining a consistent pipeline of new token launches rather than extracting ongoing value from any single token. The business model resembles a venture capital fund's portfolio approach: generate enough winners to make the overall economics work, even if most individual tokens fade quickly.

Solana's Competitive Intensity vs. Ethereum's Stability

The discussion highlighted a fascinating contrast between Solana and Ethereum in terms of competitive dynamics. On Ethereum, specific sectors tend to produce stable, long-term winners—Aave for lending, Uniswap for DEX trading, Lido for liquid staking. Carlos characterized Solana as "incredibly more competitive," noting that the ecosystem has rarely seen a durable player maintain leadership in any sector for extended periods.

This competitive intensity manifests in constant boundary-crossing between categories. Jupiter ventures into lending to compete with Kamino, while Kamino explores MEV aggregation to compete with Jupiter. "The lines get a lot more blurred" on Solana, Carlos observed, creating an environment where success requires constant innovation and expansion rather than category leadership alone.

Market structure on Solana is also significantly more advanced than on Ethereum. Prop AMMs have become a dominant force on Solana but haven't emerged on Ethereum mainnet. Dan suggested this partially reflects Ethereum's block time and gas constraints—the performance limitations make prop AMM-style execution competition less viable. As Ethereum potentially moves toward faster blocks and higher throughput, similar market structure developments may follow, but Solana maintains a significant lead in this evolution.

The Absence of Prop AMMs on Ethereum

The conversation explored why prop AMMs haven't emerged on Ethereum despite the clear advantages they demonstrate on Solana. Several factors contribute to this absence. First, Ethereum's 12-second block times create a fundamentally different execution environment where rapid oracle updates provide less competitive advantage. Second, the cost structure differs dramatically—storage slot updates are expensive in EVM environments, making frequent oracle updates economically challenging.

Dan referenced research suggesting that storage slot costs represent a significant design challenge for anyone attempting to bring prop AMM mechanics to Ethereum. "The Oracle update process would be fairly expensive on a relative basis. It was like a design challenge that seemed unsolved at the moment of writing," he noted. While RFQ (Request for Quote) systems exist on Ethereum through aggregators like Uniswap and 1inch, these don't provide the same execution quality improvements as true on-chain prop AMMs.

Arbitrum presents additional complications due to Time Boost, which creates specific market structure dynamics where a single entity holding priority ordering rights could systematically pick off prop AMM positions. "If you have one entity that owns the right to essentially be first, that will lead to picking off every prop AMM," Dan explained. This structural vulnerability may prevent prop AMM development on Arbitrum specifically, even if other L2s could potentially support such mechanisms.

The STAMP Model: Solving Crypto's Dual Token-Equity Problem

Colosseum's STAMP (Simple Token Agreement, Market Protected) model represents a significant innovation in how crypto projects structure their fundraising and token launches. The model directly addresses the dysfunction of the traditional safe-plus-token-warrant structure that has dominated crypto venture capital. Under the standard model, investors hold both equity and token warrants, creating misaligned incentives and legal complexity that often disadvantages token holders relative to equity investors.

"The preeminent model today for raising in crypto is just like the SAFE model... a safe for future equity plus a token warrant. That's what gives rise to essentially these dual token equity structures that end up causing all these issues," Carlos explained. The recent drama around various DAOs and their associated labs entities illustrates how these structures can break down, with equity holders and token holders finding themselves on opposite sides of value allocation decisions.

STAMP proposes a simpler alternative where teams raise privately and then, leading up to their ICO through Metadow, all project IP and legal structures get transferred to a token-governed entity. The result is a single-asset structure where "all value accrues to the token and the equity is worth zero." This eliminates the conflict between token holders and equity holders by ensuring there are no equity holders to conflict with.

Mechanical Protections for Token Holders

Beyond structural simplification, the STAMP model includes specific mechanical protections that constrain team and investor behavior. These constraints cannot be circumvented through negotiation or reinterpretation—they're built into the system architecture. "Only 20% of the total supply can be allocated to the investors. Only up to 40% can be allocated to the team and the team allocation is based on certain milestones," Carlos detailed.

The milestone-based team allocation represents a significant departure from traditional vesting schedules. Rather than simply receiving tokens over time regardless of performance, teams must demonstrate concrete achievement of defined goals before unlocking their full allocation. This creates ongoing accountability even after the initial ICO, aligning team incentives with sustained performance rather than simply surviving until cliff dates pass.

These mechanical protections serve as a form of market-enforced governance that doesn't rely on legal recourse or regulatory intervention. Token holders gain assurance not through trust in the founding team's goodwill, but through the technical impossibility of violating the terms. This "post-legal" approach to investor protection may prove particularly valuable in jurisdictions where legal enforcement of token holder rights remains uncertain or impractical.

The Optionality of Token Launch Timing

One of STAMP's most valuable features is the optionality it provides around token launch timing. Under the traditional ICO model through Metadow, teams essentially conduct their seed round simultaneously with their public token launch. This creates challenges for founders who may not want price discovery and public market feedback while still iterating on product-market fit.

"Some people like it. Ram from Abhichi really likes having a live token. That gives him constant feedback on whether or not his product is working or not," Carlos acknowledged. But many founders prefer the traditional path of building in relative obscurity before facing public market scrutiny. STAMP allows teams to raise privately through standard venture processes, then convert those investors at the ICO stage when the team feels ready for a public token.

This flexibility means projects are no longer forced into a binary choice between entirely traditional venture financing (with its dual structure problems) and day-one token launches (with their execution challenges). They can move through private funding rounds at their own pace, then transition to the token-native model when circumstances are right. The conversion process ensures all investors end up aligned around a single asset rather than split between equity and token holdings.

The Psychological Challenge of Live Token Prices

The discussion raised important questions about the psychological toll of managing a live token from the earliest stages of company development. While the crypto-native audience may be desensitized to extreme volatility, most people find such fluctuations deeply distressing. "I think a lot of at least OG industry participants have been desensitized to" massive portfolio swings, Dan observed, noting that this emotional resilience is far from universal.

For employees joining crypto startups, the difference between traditional equity compensation and live token compensation is profound. Traditional startup equity exists as a largely imaginary number that updates every six to eighteen months at new funding rounds. Token-based compensation, by contrast, delivers real-time feedback that can swing wildly based on factors entirely outside the company's control.

The community dynamics around live tokens add another layer of stress. Unlike traditional company shareholders, token communities often congregate in Discord and Telegram channels where they vocally express displeasure at price movements. "People who surely like be on the this for like yelling at the founder, be on the telegram chat yelling at the founder. Why is the price going down? Why is it going up?" Carlos noted. This creates a constant distraction from product development that traditional startup founders don't face.

Are Tokens a Stopgap for Tokenized Equity?

Danny posed a provocative question: are tokens in their current form simply a stopgap until legalized tokenized equity becomes possible? The question cuts to the heart of what makes tokens valuable versus equity. Carlos argued that investors ultimately don't care about the specific form—they want "a claim on residual cash flows, a claim on the assets, and legal recourse." If a token provides all three, it functions equivalently to equity regardless of its technical classification.

The advantage of the current token model, particularly as implemented through Metadow and STAMP, is that it doesn't require regulatory approval or legislative action. It represents a "post-legal system where you have market protected tokens and have a mechanistic design that actually protects token holders from being wrong," Carlos explained. This makes progress possible immediately rather than waiting for regulatory clarity that may take years to arrive.

If tokens can be structured to look and feel like equity in all material respects, then the distinction becomes largely academic. Projects like Morpho and Jito demonstrate that tokens can be designed with strong governance rights and value accrual mechanisms. The key is ensuring the token captures the economics of the underlying business rather than existing as a separate, disconnected asset from the value-creating entity.

The State of Onchain Equities on Solana

The conversation turned to the current state of tokenized equities trading on Solana, which remains nascent despite growing interest. X Stocks and Backed represent the primary spot offerings, with daily trading volumes in the "low to mid eight figures" concentrated in names like Tesla, SpaceX, and Nvidia. This is significant activity but still dwarfs compared to traditional brokerage volumes for the same assets.

On the perpetual futures side, Hyperliquid has emerged as the leader with its equity perps offerings. The top pair, serving as a proxy for the Nasdaq (QQQ), generates over $100 million in daily volume. Other equity perps show similar concentration patterns—mag seven names, major indices, and crypto-adjacent stocks like Coinbase and Robinhood generate the bulk of activity.

Dan shared screen data showing X Stock volume on Solana at approximately $40 million, up from about $20 million earlier in the year when the products launched. Tesla dominates this activity with roughly $23 million in 30-day volume—about as much as the next three assets combined. The volume growth is encouraging, but organic retail demand remains limited compared to arbitrage-driven activity.

The Composability Advantage for Solana

Carlos argued that Solana holds a significant advantage over Hyperliquid and other venues for tokenized equity trading due to composability between spot and perpetual products. Having both product types on a single chain enables complex strategies—delta neutral positions, hedging via spot against perp exposure, and other sophisticated approaches that require atomic transactions across multiple protocols.

"That composability is actually super useful and can enable Solana to capture a big portion of that market," Carlos noted. The same composability advantages that have enabled Solana to capture CEX-DEX arbitrage flows through prop AMMs can apply to equity trading as the market matures. Traders executing sophisticated strategies will prefer venues where they can express those strategies in single, atomic transactions rather than managing cross-venue risk.

The comparison to prop AMM dynamics is instructive. Carlos pointed to Dan's analysis showing how CEX-DEX arbitrage has moved onchain because "humidify is composable with the rest of the Solana ecosystem, you can do that arbitrage in a single atomic transaction with less risk to the trader." Similar efficiency gains await equity market participants when both spot and derivatives products achieve sufficient liquidity on Solana.

Barriers to Onchain Equity Adoption

Several barriers currently limit broader adoption of onchain equity trading. First, the asset breadth remains limited—while major names like Tesla and Nvidia are available, most of the market remains unlisted. Dan mentioned wanting to buy Rivian but finding it unavailable onchain, forcing him back to traditional brokerage channels. Each missing asset represents a potential user who cannot fully migrate their equity exposure onchain.

Second, spreads on onchain equity products likely remain wider than traditional brokerage execution. "I'm betting the on chain spread is probably much worse than buying a stock at a brokerage," Danny suggested. For users with existing brokerage relationships, the convenience benefit of onchain trading may not justify the execution quality degradation. The value proposition is clearest for users without access to traditional brokerages—precisely the demographic that currently struggles to access crypto infrastructure.

Third, trust and risk assessment remain challenges. "Whenever I hold a non-native asset, I just have to ask myself over and over again, like what is the fail state here," Danny noted, referencing the Wormhole ETH bridge hack as an example of non-native asset failure modes. While X Stocks' fail risk appears low—similar to USDC's counterparty risk—users must still assess and accept these risks before committing capital.

Robinhood's Onchain Equity Strategy

Robinhood's tokenization initiative provides important validation for onchain equity trading. The brokerage has tokenized up to 2,000 stocks on Arbitrum, executing against the roadmap CEO Vlad Tenev presented at ECC. While these assets cannot yet trade freely onchain, the tokenization infrastructure is being built. "They're executing that chalkboard game plan pretty well so far. And their goal is to enable fully onchain trading," Dan observed.

The convergence from both directions—crypto-native platforms tokenizing equities and traditional brokerages bringing assets onchain—suggests eventual market maturation. Where these approaches meet in the middle remains an open question, but the investment from both sides indicates genuine conviction that onchain equity trading will become meaningful.

Robinhood also provides seamless USDC on/off ramping for Solana users, enabling zero-fee, zero-spread conversion between USDC on Solana and USD in Robinhood accounts. "You can swap USDC from SOL to dollars in a Robin Hood account with zero fees and zero spread. So 30,000 USDC is $30,000," Dan noted. This infrastructure reduces friction for users who want to move between onchain and traditional finance.

The Regulatory Arbitrage Opportunity

Tokenized equities provide regulatory arbitrage opportunities for brokerages seeking to serve markets where they lack securities licenses. By offering tokens that provide economic exposure to stocks without constituting regulated securities in certain jurisdictions, platforms can onboard users they couldn't otherwise serve. This explains part of the interest from traditional players in tokenization.

"What tokenizing stocks does for Robinhood and probably these other trad venues is a regulatory arbitrage in jurisdictions where they maybe couldn't get a license to offer securities," Danny explained. A user in a country without a licensed Robinhood presence could potentially access stock exposure through tokenized products, bypassing the lengthy and expensive process of obtaining local securities regulatory approval.

This regulatory dynamic also creates distribution challenges for crypto-native platforms. While X Stocks exists and functions on Solana, users in many jurisdictions may be more familiar with Robinhood or Coinbase branding. Brand recognition and distribution networks will likely determine which platforms capture onchain equity volume as the market develops.

The Role of Consumer Applications

Realizing the potential of onchain equity trading will require consumer applications that leverage the underlying infrastructure. The neo-bank trend around stablecoins demonstrates how consumer interfaces can drive adoption of onchain infrastructure. Similar applications focused on equity access—particularly for underserved markets—could drive meaningful volume to onchain equity products.

Dan predicted that many neo-banks will begin incorporating equity functionality, either as a complement to or priority over stablecoin access. These applications would abstract away the complexity of onchain interaction, presenting users with familiar interfaces for stock trading while leveraging Solana's infrastructure for execution and settlement.

The key is reaching users who would genuinely benefit from onchain equity access—those without traditional brokerage options or seeking to avoid the friction and costs of legacy financial infrastructure. "You just need to tap into X stocks and whatever assets are listed, you can provide your users. And that's going to be the driving force there," Dan predicted.

Looking Ahead to 2025

As the conversation concluded, the hosts looked ahead to developments expected in 2025. Multiple teams are building perpetual futures products on Solana—Bulk, Phoenix—that will compete with Hyperliquid for equity and crypto derivatives volume. The composability advantage of having both spot and perps on Solana creates natural synergies these projects can exploit.

Token issuance dynamics will continue evolving, with the STAMP model providing a new option for teams seeking to avoid dual token-equity structures while maintaining private funding flexibility. Metadow's position at the intersection of token issuance and AMM liquidity appears increasingly defensible as the importance of vertical integration becomes clearer.

Prop AMMs will likely continue gaining share of mature asset trading volume on Solana, with infrastructure investment and oracle update speed remaining key competitive differentiators. Traditional AMMs without token issuance relationships face an uncertain future—as Carlos bluntly stated, platforms like Raydium and Orca that lack this moat "risk fading into irrelevance."

The Maturation of Solana's Market Structure

The broader theme emerging from the discussion is Solana's market structure maturity relative to other ecosystems. The presence of prop AMMs, the sophistication of vertical integration strategies, and the experimentation with new token models all reflect an ecosystem pushing boundaries that remain unexplored elsewhere.

This maturity creates both opportunities and challenges. Opportunities arise from the ability to build products and strategies that simply aren't possible on less advanced chains. Challenges emerge from the relentless competition that prevents any single player from resting on past success. The Solana ecosystem demands constant innovation from participants seeking to maintain or expand market position.

For builders and investors alike, understanding these dynamics is essential for navigating Solana's DeFi landscape in 2025. The winners will be those who correctly identify which side of the prop AMM versus traditional AMM divide their project belongs on, and who execute the appropriate integration strategy—horizontal for execution quality, vertical for distribution control.

Conclusion: Convergence and Competition

The final Lightspeed episode of 2024 painted a picture of an ecosystem at an inflection point. Multiple trends are converging—the maturation of prop AMMs, the emergence of new token issuance models, and the nascent growth of onchain equities—while competition intensifies across every category.

Solana's advantages in speed, cost, and composability position it well to capture value as these trends develop. But success isn't guaranteed. Hyperliquid challenges Solana in derivatives. Ethereum's potential performance improvements could eventually enable similar market structure developments. And within Solana, the relentless competition means today's leaders may be tomorrow's laggards.

What seems certain is that 2025 will bring significant evolution in how assets are issued, traded, and held on Solana. The frameworks discussed—prop AMMs for execution, vertical integration for distribution, STAMP for token structuring—provide mental models for understanding this evolution. The teams that best understand and execute within these frameworks will define the next phase of Solana's DeFi development.

Facts + Figures

• Humidify oracle updates: Approximately 3 times per second, significantly faster than other prop AMMs, with high success rates in the 90%+ range
• Humidify transaction fees: Over $1 million paid in transaction fees and Jito tips for oracle updates across four USDC pools over their lifetime
• Spread range: Prop AMMs quote spreads from approximately 0.5 basis points to 60 basis points depending on trade size
• Trade size analysis: Data covers $1,000 to $1,000,000 purchases across different DEX venues
• STAMP allocation limits: Maximum 20% of total token supply can be allocated to investors; up to 40% to the team based on milestone achievement
• X Stocks volume on Solana: Approximately $40 million daily, up from $20 million at launch in July
• Tesla X Stocks dominance: Approximately $23 million in 30-day volume, roughly equal to the next three assets combined
• Hyperliquid equity perps: Top pair (QQQ proxy) generates over $100 million in daily volume
• Robinhood tokenization: Up to 2,000 stocks tokenized on Arbitrum as part of onchain equity initiative
• Raydium impact: Lost significant volume when Pump.fun redirected graduated coins to its own AMM, and has not recovered
• Block timing contrast: Ethereum's 12-second blocks versus Solana's sub-second execution creates fundamentally different market structure dynamics
• DEX dominance prediction: Short-tail assets will increasingly be dominated by prop AMMs; long-tail by traditional AMM liquidity
• Arbitrum constraints: Time Boost mechanism would allow single entities to systematically pick off prop AMM positions, making prop AMMs unviable
• Morpho and Jito: Cited as examples of tokens with strong governance rights and value accrual mechanisms approximating equity-like properties

Questions Answered

What are prop AMMs and why are they important on Solana?

Prop AMMs (proprietary automated market makers) are sophisticated trading venues that use frequent oracle updates and advanced market-making strategies to provide tighter spreads than traditional AMMs. On Solana, they've become the dominant venues for trading mature, high-volume assets like SOL/USDC. The key differentiator is their ability to update pricing up to three times per second, enabling them to quote competitive spreads across trade sizes from $1,000 to over $1,000,000. Teams like Humidify invest heavily in infrastructure—including transaction landing services and block building systems—to achieve this execution quality. The result is that arbitrageurs and sophisticated traders route through prop AMMs for major pairs, capturing significant market share from traditional AMMs.

What is the STAMP model and how does it solve token-equity problems?

STAMP (Simple Token Agreement, Market Protected) is Colosseum's new framework for crypto fundraising that eliminates the problematic dual token-equity structure. Under traditional crypto venture structures, investors receive both equity (through SAFEs) and token warrants, creating misaligned incentives where equity holders and token holders often have conflicting interests. STAMP allows teams to raise privately, then at ICO, all project IP and legal structures transfer to a token-governed entity where "all value accrues to the token and the equity is worth zero." The model includes mechanical protections—only 20% to investors, up to 40% to teams based on milestones—that cannot be circumvented. This creates a single-asset structure with built-in accountability.

Why are traditional AMMs losing market share to prop AMMs?

Traditional AMMs cannot compete on execution quality against prop AMMs for mature assets because they lack the sophisticated infrastructure—fast oracle updates, transaction landing services, and block building capabilities—that enable tight spread quoting. Since prop AMM order flow primarily comes from aggregators that route to the venue with best execution, traditional AMMs lose this volume automatically. The only sustainable strategy for traditional AMMs is vertical integration into token issuance, as demonstrated by Pump.fun launching its own AMM. When Pump.fun redirected graduated coins away from Raydium, Raydium lost its largest volume source and hasn't recovered. Traditional AMMs without control over token issuance "risk fading into irrelevance."

What is the current state of tokenized equities on Solana?

Tokenized equities on Solana remain nascent but growing. X Stocks volume is approximately $40 million daily, up from $20 million at launch. Trading is heavily concentrated—Tesla alone represents about $23 million of 30-day volume, roughly equal to the next three assets combined. Other popular names include Circle, SpaceX, and Nvidia. However, organic retail demand appears limited, with much volume likely driven by arbitrage activity between onchain and offchain markets. The spread onchain is probably wider than traditional brokerages, limiting appeal for users with existing brokerage access. The opportunity is clearest for underserved markets lacking traditional financial infrastructure.

How does Solana's competitive landscape differ from Ethereum's?

Solana exhibits significantly more intense competition than Ethereum, where categories tend to produce stable, long-term winners (Aave for lending, Uniswap for DEXs, Lido for LSTs). On Solana, multiple leaders have cycled through most sectors, and applications constantly venture into adjacent categories—Jupiter into lending, Kamino into aggregation—blurring traditional sector boundaries. Market structure is also more advanced, with prop AMMs dominating mature asset trading in ways that haven't emerged on Ethereum. This partly reflects Ethereum's 12-second block times and gas constraints making prop AMM-style competition less viable, though similar developments may follow if Ethereum moves toward faster blocks and higher throughput.

Should crypto projects launch tokens on day one?

There's no universal answer—it depends on the founder's personality and risk tolerance. Having a live token provides real-time market feedback on product progress, which some founders like Ram from Abhichi find valuable. However, live tokens create psychological challenges for employees unaccustomed to extreme volatility and distract founders with community management demands. "People are like, 'No, no, no. What do you mean? I own my index funds,' and that's it," as Dan noted about non-crypto investors' risk tolerance. The STAMP model provides optionality—teams can raise privately, then launch tokens when ready, rather than forcing day-one token launches alongside seed funding.

What advantages does Solana have for onchain equity trading?

Solana's primary advantage for onchain equity trading is composability between spot and perpetual products on the same chain. This enables complex strategies—delta neutral positions, hedging via spot against perp exposure—in single atomic transactions rather than managing cross-venue risk. "That composability is actually super useful and can enable Solana to capture a big portion of that market," Carlos argued. The same composability that enabled CEX-DEX arbitrage to move onchain through prop AMMs can apply to equity trading as markets mature. Additionally, Solana's low fees and fast finality make frequent trading economically viable compared to Ethereum.

Why hasn't Ethereum developed prop AMMs?

Several factors prevent prop AMM emergence on Ethereum mainnet. First, 12-second block times create a fundamentally different execution environment where rapid oracle updates provide less competitive advantage. Second, storage slot updates are expensive in EVM environments, making the frequent oracle updates that characterize prop AMMs economically challenging. Third, on certain L2s like Arbitrum, the Time Boost mechanism allows single entities to systematically front-run, which would make any prop AMM instantly vulnerable to being picked off. While RFQ systems exist through aggregators, they don't provide the same execution quality improvements as true on-chain prop AMMs. If Ethereum moves toward faster blocks, similar developments may follow.