A quick overview of what HumidiFi is: Daily trading of 1 billion USD, ICO launched on Jupiter on December 3.

The leading decentralized exchange on the Solana ecosystem, HumidiFi, has released its project White Paper, revealing its core architecture as a “proprietary Automated Market Maker”. The protocol processes an average daily volume exceeding $1 billion, accounting for about 35% of the total spot DEX activity on Solana, dominating over 70% of the prop AMM submarket. By combining on-chain settlement with off-chain prediction models in an “active liquidity” framework, HumidiFi aims to address the capital inefficiencies and excessive spreads of traditional AMMs, building the foundational liquidity layer for Solana's “Internet Capital Market”.

HumidiFi (WET) will launch its ICO on December 3rd on Jupiter's Decentralized Token Formation (DTF) platform, with specific ICO details yet to be disclosed.

The Dilemma of DeFi 1.0: Why Traditional AMMs Cannot Meet Market Demands?

Traditional Automated Market Makers (AMM) were the cornerstone of the DeFi explosion, but their original design aimed for simplicity and fairness rather than extreme market performance. Their static liquidity curves cannot respond in real-time to the rapidly changing market, leading to a series of systemic inefficiencies: rigid pricing mechanisms that cannot reflect real-time market conditions; low capital efficiency, with liquidity dispersed across various price ranges rather than concentrated in the areas where real trading occurs; wide bid-ask spreads and weak price discovery functions, resulting in poor execution quality for users.

Furthermore, traditional AMMs lack an effective user tiering mechanism, causing ordinary retail users to compete in the same pool as arbitrageurs or bots with informational advantages (often referred to as “toxic flow”), resulting in retail users often facing worse execution prices and higher slippage. The fragmentation of liquidity, impermanent loss penalties for liquidity providers, and the surge in transaction failure rates during periods of high volatility have led to increasing calls for new solutions that combine the execution quality of Centralized Exchanges with the transparency of decentralized custody.

In such a market context, the new generation of “proprietary AMM” (prop AMM) has emerged and rapidly risen on Solana. Data shows that prop AMM has accounted for nearly 75% of the total trading volume on DEX on Solana, and in just one year, the market share of this segment skyrocketed from less than 10% to over 70%, completing a disruptive replacement of traditional AMM. HumidiFi is the absolute leader in this wave, handling over 60% of the trading volume.

The Breakthrough of HumidiFi: Decoding the Active Liquidity Framework

HumidiFi's core innovation lies in its “active liquidity” framework, which aims to fundamentally address the pain points of traditional AMMs mentioned earlier. This framework does not rely on fixed mathematical curves, but introduces a dynamic management logic more akin to professional market makers. Its core mechanisms include: “predictive pricing” based on real-time market data and internal risk indicators, allowing quotes to closely follow market trends; dynamic inventory management, continuously rebalancing risk exposure to avoid outdated quotes and pricing errors, thus maximizing capital efficiency.

Its architecture follows the principle of “on-chain settlement, off-chain intelligence.” All heavy computations and predictive models run off-chain, ensuring that speed and complexity are not limited by the blockchain itself; while asset custody, final settlement of transactions, and ledger records are completely conducted on the Solana chain, ensuring the decentralized security of funds and the immutability of transactions. This design cleverly balances performance and security.

More importantly, HumidiFi's engine can identify and distinguish between retail users and arbitrage bots. By adapting in real-time to adversarial behavior instead of simply banning addresses, the system can provide real users with better spreads and a smoother trading experience, making its execution quality infinitely close to mainstream CEX while retaining the non-custodial and composability advantages of DeFi, in stark contrast to the fully closed Request for Quote (RFQ) model.

HumidiFi Core Architecture and Market Position Key Data

• Market Position: Solana's largest DEX, with a daily volume exceeding 1 billion USD, accounting for 35% of the network's spot DEX.
• Technical Paradigm: Dominates the prop AMM track, handling over 60% of the trading volume in this segment.
• Growth Trend: prop AMM's share in Solana DEX increased from <10% to >70% within a year.
• Core Architecture: The proactive liquidity framework of “on-chain settlement + off-chain prediction model”
• Integrated Ecosystem: Deeply integrated with mainstream Solana routing protocols such as Jupiter, DFlow, and Titan.

Technical Depth: Engine Tailored for Solana's High-Performance Features

The architecture of HumidiFi is deeply adapted to the high-performance features of Solana—high throughput, low latency, and parallel execution. Its system consists of three core parts: first, the on-chain program, which is responsible for handling transaction execution, Settlement, and accounting, managing and rebalancing on-chain inventory, while identifying and penalizing toxic flow, ensuring that the network does not get clogged during volatility with minimal computational overhead. Second, there is the off-chain orchestration layer, which runs proprietary quoting logic and predictive models, aggregating price data from both centralized and decentralized markets, and continuously injecting the latest information into the on-chain program.

The third is the transaction submission and routing layer, which utilizes technologies like Nozomi to achieve optimal transaction submission strategies, optimizing the timing and method of sending transactions to the Solana network, thereby reducing latency, minimizing transaction loss and execution uncertainty, and ensuring that high-frequency quotes can be updated and executed in a timely manner. Its proprietary market-making logic is not open-sourced, as the team believes that publicly disclosing core algorithms historically leads to predatory traffic and toxic MEV, ultimately harming the retail user experience. Therefore, HumidiFi chooses to maintain a healthy spread through real-time adaptive algorithms.

Its off-chain oracle is powered by world-class HFT (High-Frequency Trading) models, capable of continuously feeding market data streams into the system. A single oracle signal can update the quotes for all supported markets, and this high-frequency, low-cost updating mechanism allows HumidiFi to react to market changes in near real-time without burdening the network. Thanks to the deep utilization of Solana's parallel execution and account model, transaction confirmations can be completed in milliseconds, and hundreds of liquidity pools can update quotes based on a single oracle event, maintaining low network congestion even during periods of high market volatility.

Ecological Vision: From Leading DEX to Solana's “Universal Liquidity Layer”

HumidiFi's ambitions go far beyond becoming a high-performance exchange. Through its completed deep integrations with core routing and trading infrastructure like Jupiter, DFlow, and Titan, it ensures that a significant portion of the funds flow naturally to HumidiFi's liquidity pools when users trade within the Solana ecosystem. The team is actively expanding integrations with wallet front-ends, data analytics providers, and portfolio management tools to comprehensively cover user entry points.

Its architectural design features distinct universality and scalability. On one hand, the project team can create new independent trading pair pools, each pool sharing the same oracle infrastructure, pricing framework, and execution guarantees. This provides a universal platformed AMM service for large routers and institutional partners. On the other hand, it paves the way for “issuer centralized liquidity pools” aimed at specific token issuers, which can be managed by professional market-making teams with customized strategies.

The long-term vision is clear and grand: HumidiFi is committed to evolving from a single DEX into a universal liquidity layer supporting Solana's “Internet Capital Market.” This layer will be fast, fair, transparent, and open to anyone with a wallet. In the future, by bridging assets, the same set of execution standards from HumidiFi can even be extended to non-Solana native tokens, achieving unified and efficient management of cross-chain liquidity.

Industry Insights and the Paradigm Shift of DeFi 2.0

The rise of HumidiFi and its technical path clearly outline the evolution direction of DeFi from 1.0 to 2.0. It represents a shift from passive, static liquidity supply to active, predictive liquidity management; from fragmented, disconnected markets to a unified, aggregated liquidity network layer; and from simple, public mathematical curve pricing to a hybrid model that integrates institutional-level market-making wisdom while still maintaining on-chain transparency and openness.

For different market participants, HumidiFi means different values. For traders, it offers an execution experience comparable to CEX without sacrificing asset self-custody. For token issuers, it promises a healthy and deep secondary market from day one of listing. For liquidity providers, its dynamic inventory management is designed to optimize capital efficiency and manage risk. And for the entire Solana ecosystem, HumidiFi, as a key infrastructure, is transforming the technological potential of “high-performance blockchain” into a real and usable “high-performance financial market” user experience.

Conclusion: Building the Future Financial Market Infrastructure

The release of the HumidiFi White Paper is not just a retrospective summary of a successful project, but more like a declaration for the future. It proclaims that on a blockchain with native high performance like Solana, DeFi is no longer satisfied with merely imitating and decentralizing traditional finance, but is beginning to explore the advantages of blockchain and algorithms to build a superior capital market system that is native to the internet.

Of course, challenges still exist, including trust assumptions regarding off-chain components, system stability under extreme market conditions, and how proprietary algorithms, acting as a “black box,” can maintain community trust in the long term. However, it is undeniable that the prop AMM direction represented by HumidiFi has proven its vitality with substantial market share and data. It is redefining how liquidity forms, moves, and performs on Solana, and providing a highly valuable model for the entire industry to explore the forms of DeFi 2.0. The journey to build an internet capital market may, as it states, be just beginning.