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Documentation Index

Fetch the complete documentation index at: https://docs.hyfi.finance/llms.txt

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Two central assertions underpin everything that follows:
  1. Most LPs lose money because of toxic flow. Toxic flow exists because AMMs aren’t aware of CEX prices.
  2. Users only care about the best prices.
Because of this, on Solana, proprietary AMMs have taken over the lion’s share of DEX volume. The reason is simple: a professional market-maker quoting from a live CEX order book (where the price discovery is taking place) is structurally more efficient than a passive constant-product curve.
  • Tighter spreads.
  • Real-time price updates instead of getting arbitraged to death.
  • Inventory and hedging logic that passive LPs can’t replicate.
This same shift is already happening on EVM chains — but more slowly. EVM has years of accumulated passive AMM liquidity (Uniswap, Curve, Balancer, etc.) that propAMMs have to outcompete trade-by-trade, so a lone propAMM’s edge is smaller than the equivalent on Solana. There’s also a hard cost asymmetry: pushing fresh prices on-chain is cheap on Solana but prohibitively expensive on EVM for a single MM to fund alone. That’s exactly the cost a shared platform like HyFi amortises across every MM on it — turning a per-MM impossibility into a shared utility.

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Why a platform matters

The answer isn’t to wait for any single propAMM to grow big enough on its own — it’s to pool the efforts of many propAMMs into one platform so they share infrastructure and reach. Once that platform exists, two effects compound on top of the shared oracle and shared aggregator integration:
  • Liquidity network effects. Routers see HyFi as a single, deep venue. More flow attracts more MMs, and more MMs attract more flow.
  • On-platform MM competition. Any market-maker can deploy their own Quoter on HyFi and compete head-to-head on the same hook. The best price wins each trade, so the platform’s quality floor rises as more MMs join.

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Where HyFi wins biggest

HyFi effectively brings CEX liquidity to DEXes. That means that, even though HyFi is still more profitable than AMMs for most pairs generally, HyFi’s edge is largest on pairs that are:
  • Deeply liquid on CEXes — so the market-maker can hedge cheaply and quote tight.
  • Shallowly liquid on the DEX — so the passive AMM competition is weakest.
The clearest sweet spot today is majors on L2s: pairs like BTC-USD on Base / Arbitrum / Optimism, where CEX liquidity is orders of magnitude deeper than on-chain liquidity. Other strong fits include long-tail majors, new-chain launches, and any pair where on-chain TVL hasn’t caught up to off-chain volume.

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The self-reinforcing loop

Once a propAMM platform starts winning large trades on a pair, a feedback loop kicks in: Each rotation of the cycle:
  1. HyFi captures the high-impact trades where the passive curve charges the most slippage.
  2. With less volume left, passive LP APY falls.
  3. Passive LPs withdraw to seek yield elsewhere.
  4. Pool depth drops, which lowers the trade-size threshold at which HyFi starts beating the AMM.
  5. HyFi captures more trades — and the cycle continues.
The long-run equilibrium is one where traditional constant-product AMMs are no longer the dominant venue for liquid majors on EVM chains, mirroring what already happened on Solana.

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Why now

  • L2 fees are already low enough to make extremely frequent on-chain price updates viable, and Ethereum’s renewed focus on scaling the L1 brings the same economics to mainnet.
  • Uniswap v4 hooks make it possible to slot a propAMM directly into the most-used DEX surface on EVM.
  • The first wave of EVM propAMM teams is forming today; the platform that aggregates them captures the network effects.