Kyle Samani: PropAMM is one of the most important innovations in market microstructure in decades

Odaily reported that Kyle Samani posted on X, stating that PropAMM is one of the most important innovations in market microstructure in recent years, and possibly one of the most significant innovations in decades.

Samani explained that in traditional CEXs, there are small but real latency differences between different market makers—even just a few microseconds can determine who updates quotes first and who gets the trade. Therefore, in traditional markets, market makers invest heavily in optimizing physical co-location, fiber optics, network equipment, and hardware, all to gain an advantage in microsecond-level competition. The beauty of propAMM is that the blockchain itself directly "hosts" the market maker algorithms, and the latency required for market makers to update prices only involves electrons moving within the same physical silicon chip. If the previous market order causes the SOL-USD price to change, this information is immediately visible to all propAMMs and is used for pricing the next market order. Everything happens within the same chip, and there is no longer a need for bidirectional communication between servers.