Source: Blockwork Research
Author: Carlos Gonzalez Campo
Compiled and edited by: BitpushNews
Key points
- The dominant landscape of Solana DEX will diverge based on asset maturity : Active market makers (AMMs) will continue to dominate the short-tail, high-liquidity market, while passive AMMs will increasingly focus on long-tail assets and new token issuances.
The winning strategies of the two types of AMMs are quite different : they can both benefit from vertical integration, but in opposite directions. Passive AMMs are getting closer to users through token issuance platforms (such as Pump - PumpSwap , MetaDAO - Futarchy AMM), while active market-making AMMs extend downstream, focusing on transaction landing services (such as HumidiFi - Nozomi ).
HumidiFi leads the active market-making AMM category with approximately 65% market share, with the majority of its trading volume concentrated in the SOL-USDC and SOL-USDT trading pairs. Its oracle update instruction costs are among the best in its class, demonstrating superior mark-to-price spread performance compared to peers like SolFi and Tessera, as well as passive AMMs.
- The standalone passive AMM model is outdated. The future winners of "passive AMM" will no longer be seen as pure AMMs, but rather as token issuance platforms that vertically integrate AMM as a profit layer—for example, becoming a launchpad like Pump, or an ICO platform like MetaDAO.
- DEXs that do not fall into any of the above categories will face a structural decline in growth . Protocols that are neither active market makers (AMMs) nor vertically integrated issuance platforms (most notably Raydium and Orca) are at a structural disadvantage and may become losers in this trend.
Valuation should reflect both business quality and token value accumulation . Multiples such as price-to-sales ratio (P/S) are only meaningful in the context of growth prospects and credible value capture by token holders. WET is a case in point: it appears undervalued compared to its peers, but its trading price still reflects this undervaluation due to the uncertainty surrounding its long-term token empowerment.
Foreword
In February 2025, we published a report on the competitive landscape of the Solana DEX. At that time, DEX trading volumes were at all-time highs, and we (in hindsight) over-anchored a 90-day rolling window that included exceptionally volatile periods: the post-US election rebound in Q4 2024, the Trump meme frenzy in January, and the LIBRA-driven surge in February. At that time, Raydium was the leading DEX, holding approximately 50% market share, and most of the DEX trading volume on Solana came from meme coins.
Today, the landscape has fundamentally changed. The rise of Active Market Makers (AMMs) has reshaped the market structure, with trading volume concentration shifting from memes to the SOL-USD trading pair. Although Lifinity pioneered the AMM model, it wasn't until the launch of SolFi in late October 2024 that AMMs began to surge and capture a significant share of trading volume in highly liquid pairs.
As active market-making AMMs continue to dominate fund flows for short-tail assets, passive AMMs are finding themselves in a precarious position, increasingly pushed towards long-tail assets and trading volume reliant on issuance. Pump's launch of its AMM in March 2025 exemplifies this dependence: once Pump channeled its graduation tokens to its own AMM, Raydium lost its largest source of trading volume and revenue, and its market share has since declined steadily. Since liquidity in passive AMMs is largely commoditized, the most likely AMMs to survive will be those protocols that control issuance and order flow .
Based on this new market structure, this report re-examines Solana's DEX landscape, updates its competitive positioning and valuation, and outlines our views on the protocols most likely to emerge victorious.
Specialization: Short-tail assets vs. Long-tail assets
Solana's DEX dominance will continue to differentiate based on asset maturity.
Active market makers (AMMs) will dominate short-tail assets (i.e., high-liquidity markets), including SOL-stablecoins and stablecoin-to-stablecoin trading pairs.
In contrast, passive AMMs like Meteora and Raydium remain more efficient at managing liquidity for long-tail assets. Active market-making AMMs are virtually nonexistent in this vertical because actively managing liquidity for new assets without real-time oracle prices is too risky for them.
Order flow: Execution vs. Issuance
Active market maker AMMs lack a front-end and therefore rely on aggregators such as Jupiter and DFlow to interact with their contracts and execute trades through their liquidity pools. In other words, active market maker AMMs need aggregators to obtain order flow.
The chart below shows that over 95% of HumidiFi's trading volume comes from DEX aggregators, and other active market maker AMMs such as Tessera, GoonFi, and SolFi exhibit similar patterns.
On the other hand, less than one-third of the transaction volume of passive AMMs comes from aggregators.
Passive AMMs cannot compete with active market-making AMMs in price execution for major assets, and because the liquidity of long-tail assets has been largely commoditized, they must compete on distribution channels .
In summary:
Active market maker (AMM) platforms must compete on price execution, with aggregators routing orders to venues offering the lowest slippage. As detailed later in the report, trade ordering is crucial for AMMs (which can be considered market makers) because they need to compete to update quotes before takers can arbitrage. Therefore, AMMs can benefit from migrating downstream and focusing on trade execution services.
Passive AMMs must compete on issuance channels, meaning they need vertical integration or they will gradually lose relevance. Unlike active market-making AMMs, passive AMMs need to reach users through token issuance platforms such as Pump-PumpSwap and MetaDAO-Futarchy AMMs.
We believe that passive AMMs that survive in the long run will eventually no longer be seen as pure AMMs . Their primary function will shift to token issuance platforms—such as launchpads or ICO platforms—while the AMM itself will merely serve as the underlying tool for monetizing tokens. Meteora is a possible exception, but its success largely relied on the traffic distribution brought by Jupiter. Below are some of the most typical examples of this trend:
- Pump (starter board) — PumpSwap
- MetaDAO (ICO platform) — Futarchy AMM
Jupiter's DTF (ICO platform) – Meteora
HumidiFi is the clearest example of a vertically integrated active market-making AMM, benefiting from Nozomi, a transaction landing service built by the same core team (Temporal).
The fundamental differences between active market-making AMMs and traditional AMMs require independent competitive analysis.
Active Market Maker (AMM): HumidiFi's Dominance
Active market maker (AMM) is a spot exchange that actively manages liquidity through oracle updates. Each AMM is operated by an independent market maker (without external liquidity providers) that uses highly optimized trading to update oracle prices, resulting in price adjustments multiple times per second. With over ten AMMs currently available on Solana, they now account for more than 50% of all spot trading volume on the chain.
As mentioned earlier, Lifinity was the first active market-making AMM, pioneering the concepts of protocol-owned liquidity and oracle-based price adjustments. However, after Ellipsis Labs (the team behind Phoenix) launched SolFi in late October 2024, Lifinity's market share rapidly declined, and trading volume continued to fall. Lifinity ceased operations on November 20, 2025, a decision that demonstrates just how fierce the competition is in the active market-making AMM space.
As shown in the chart above, SolFi accounted for nearly half of the active market maker (AMM) trading volume in the first and second quarters of 2025, but HumidiFi quickly rose to the top after its launch in June 2025. HumidiFi currently leads the active market maker AMM trading volume with a 65% market share , followed by Tessera (18%) and GoonFi (7%).
The core engineering team behind HumidiFi is Temporal, one of the most technically capable teams on Solana.
Temporal also operates other products at the infrastructure level, including Nozomi (a transaction landing service) and Harmonic (a block building system designed to compete with Jito). In addition to Temporal's contributions, HumidiFi co-founder Kevin Pang, who previously worked at Jump, Paradigm, and Symbolic Capital Partners, brings invaluable high-frequency trading expertise to this active market-making AMM.
HumidiFi exemplifies our point: unlike passive AMMs that need to migrate downstream and control end-users to capture order flow, active market-making AMMs are better suited to migrate downstream into the realm of transaction packaging and sorting infrastructure. Temporal's infrastructure stack is highly complementary to HumidiFi, enhancing its ability to optimize computational usage for oracle updates and transaction delivery.
Although HumidiFi has 18 active liquidity pools, approximately 98% of its trading volume comes from the SOL-USDC (83.3%) and SOL-USDT (14.4%) trading pairs.
CEX/DEX arbitrage is shifting towards on-chain...
According to Dan Smith, head of data at Blockworks, one of the most interesting second-order effects of the active market maker (AMM) dominating SOL-USD trading volume is that the CEX link in CEX<>DEX arbitrage is shifting to on-chain.
The situation in the past was:
1. The on-chain price is $120, and the Binance price jumps to $125.
2. The CEX<>DEX arbitrage robot will buy on-chain and sell on Binance.
3. The arbitrage robot captures a $5 difference in price.
The current situation is:
1. The on-chain price is $120, and the Binance price jumps to $125.
2. Active market makers (AMMs) quickly update their quotes to reflect Binance's price of $125.
3. Arbitrage robots can now atomically buy from lagging on-chain quotes and sell to active market makers (AMMs).
4. The arbitrage robot captures a $5 difference in price.
Because both on-chain marketplaces with lagging pricing and active market makers (AMMs) are on-chain, arbitrage can now be completed atomically within a single transaction, reducing the risk for traders. Consequently, the number of arbitrage bots leveraging flash loan to capture these opportunities has increased.
The chart below shows a very close relationship between the percentage of DEX aggregator trading volume via Active Market Maker (AMM) (left axis) and the percentage of DEX aggregator trading volume belonging to circular arbitrage (right axis). Here, we define circular arbitrage as transactions where the input and output tokens are the same, which captures the arbitrage transactions mentioned above.
This trend indicates that active market makers (AMMs) now have a higher trading volume on the SOL-USD pair than centralized exchanges (CEXs ). The chart below shows that over the past four weeks, HumidiFi's average weekly SOL-USD trading volume has exceeded $9 billion, surpassing Binance to become the largest trading venue.
Oracle progress
Active market-making AMMs adjust their pricing curves through oracle updates, making their quotes "fresher" than passive AMMs. Since oracle updates are computationally less intensive than exchanges, market makers in active market-making AMMs can update their internal liquidity pool parameters multiple times per second, thus enabling them to offer narrower spreads than passive AMMs that aggregate liquidity.
These oracle update transactions are highly optimized to consume as few computational units as possible. Since transactions in a block are ranked according to the priority fee paid per CU, a lighter-weight oracle update allows transactions to achieve a higher ranking in the block with a lower total transaction fee. Transaction ranking is crucial because there is a race to update quotes before takers can arbitrage. The chart below shows that HumidiFi has aggressively optimized its oracle update instructions, reducing computation to 47 CUs, a decrease of over 85% from its June launch.
However, the chart above only considers the CU consumed by the oracle update instruction itself. A more relevant metric is the total CU of transactions, because active market maker (AMM) relies on complete transactions to update the oracle, including any additional program calls and account processing overhead required to execute the update.
The table below shows that HumidiFi has reduced its oracle update transactions to <500 CU, the lowest among its peers. Besides HumidiFi, only Tessera and GoonFi have below 1000 CU.
Although each oracle update transaction costs approximately $0.0016, HumidiFi averages about 6 million updates per day (about 70 per second!) since reducing its total computation to below 500 CU. At this rate, HumidiFi spends approximately $9,000 to $10,000 per day on transaction packaging fees (base fee + priority fee + Jito tip).
HumidiFi's revenue
While HumidiFi's revenue is not publicly disclosed, we can estimate it by observing its token inventory growth since inception. The core idea is that since HumidiFi essentially acts as a market-making desk (there's only one LP in an active market-making AMM), every transaction with it has winners and losers. Over time, the market maker's net inventory changes reflect trading profits and losses. Therefore, we can track the cumulative net trading volume of various tokens from HumidiFi's perspective as a proxy for its revenue.
The chart below shows HumidiFi's cumulative net trading volume on SOL (98% of its trading volume originates from this), which was approximately 25,000 SOL as of December 2, 2025. By measuring the daily changes in HumidiFi's SOL inventory and multiplying these balances by the daily SOL price, we estimate that its cumulative trading revenue from its inception in June 2025 to December 2nd was approximately $4.1 million, equivalent to an average daily gross revenue of approximately $24,000.
The above method estimates on-chain transaction profits and losses. However, if HumidiFi hedges its inventory on a CEX, and funding rates, transaction fees, and hedging profits and losses occur off-chain, the estimates may differ from the actual net income.
Another important caveat is that the above estimates reflect gross revenue. After deducting $9,000 to $10,000 per day for oracle update fees, HumidiFi's implied net revenue is approximately $14,000 to $15,000 per day. Again, this is only an estimate based on existing on-chain data. A more accurate revenue estimate would require incorporating any off-chain hedging activities, as previously mentioned.
Tag Spread Analysis: Active Liquidity vs. Passive Liquidity
The mark-to-bid spread is a measure of execution quality and adverse selection by market makers, and is a useful evaluation tool for active market-making AMMs that compete with each other using the same strategy (providing delta-neutral top-of-the-line liquidity in the order book).
In this analysis, our data team focused solely on the SOL-USDC trading pair traded on HumidiFi, SolFi, and Tessera. The on-chain execution price was compared to the Binance SOL-USDC midpoint price at 30-second intervals after execution.
The profit and loss calculation formula is: `((Binance future midpoint price – Execution price) / Execution price) * Market maker direction * Trading volume in USD`.
Here, the market maker direction is defined from the market maker's perspective: +1 when an active market maker AMM buys SOL (order takers sell SOL to it), and -1 when an active market maker AMM sells SOL (order takers buy SOL from it). Furthermore, it should be noted that using the Binance midpoint as a reference may introduce cross-venue basis differences and time mismatches with on-chain execution; therefore, the price difference should be interpreted directionally, rather than as a precise breakdown of realized profits and losses.
The analysis period is from October 1 to November 22, 2025.
A cumulative positive profit/loss indicates that the market maker is executing soft/non-toxic flow, and that the price moves in a direction favorable to the market maker within 30 seconds of the trade. Conversely, a cumulative negative profit/loss indicates adverse selection, meaning that the price moves in a direction unfavorable to the active market maker (AMM) after the trade.
The chart below shows that during this period, the 30-second profit and loss of active market-making AMMs was positive, indicating that these active market-making AMMs successfully avoided toxic traffic and captured spreads from benign users. We also included aggregated data from passive AMMs on Solana, showing that the mark-to-spread performance of active market-making AMMs significantly outperformed their predecessors.
SOL - Passive Liquidity in the US Dollar: A Game Inevitably Lost
Our mark-and-spread analysis shows that active liquidity management can protect funds from toxic eaters who try to profit from mispriced assets.
The conclusion that a large portion of SOL-USD trading volume on traditional passive AMMs is not "organic" user traffic, but rather arbitrage targeting outdated quotes. The curve of a passive AMM will always lag behind the rapidly changing reference price in an active market-making AMM. This lag creates a mechanical opportunity for arbitrage bots to intervene and trade with the passive liquidity pool when mispricing occurs.
Looking at the trading volume composition of traditional AMMs, Orca still sees over 50% of its trading volume coming from SOL-stablecoin trading pairs. Meanwhile, Meteora and Raydium (both venues whose activity has historically been heavily skewed towards memes) have seen an increase in SOL-stablecoin trading volume in recent months, consistent with the previously mentioned trend of increasing arbitrage activity.
It is worth noting that newer AMMs such as PumpSwap from Pump or Futarchy AMM from MetaDAO do not set up any active liquidity pools for highly liquid trading pairs such as SOL-stablecoins.
At a more granular level, the order flow chart below shows that at least 85% of Orca's SOL stablecoin trading volume can be attributed to "MEV bot" activity. However, most of the traffic appears to originate from Wintermute's public market-making bot, rather than purely speculative arbitrage targeting outdated quotes.
In the absence of incentives and assuming participants are rationally seeking profits, LP capital on traditional AMMs for highly liquid trading pairs (SOL-stablecoin, stablecoin-to-stablecoin, BTC-stablecoin, etc.) will naturally shrink in the coming months.
Nevertheless, traditional AMMs can still play an important role in short-tail assets. In particular, they serve as backup liquidity that remains available even when active market-making AMMs withdraw liquidity during periods of stress.
The End of Standalone DEX
Although this is a report on DEXs, one of the core points we want to convey is that, apart from Active Market Makers (AMMs), the independent DEX model is dead . Cryptocurrency investors have historically tended to analyze protocols in isolation, partly because Ethereum has historically produced clear category winners: Aave in lending, Uniswap in DEXs, Lido in LSTs, and so on.
It's natural to apply the same mindset to Solana, but this won't work. First, the competition on Solana is far more intense than on Ethereum, and it's rare to see a protocol maintain long-term dominance in its vertical. Second, as we've shown throughout the report, Solana's market structure has pushed traditional passive AMMs towards long-tail assets, where they can be used to support day-one liquidity and enable on-chain price discovery.
The problem is that DEXs lack a moat, or at least not on their own. With AMM liquidity becoming increasingly commoditized, launching a new AMM with a constant or centralized liquidity pool is insignificant. To win order flow as a traditional DEX, you must be closest to the end user, which means you must control the issuance channel, thus becoming the token issuance layer.
Following this logic, we will no longer view "Winner Spot DEX" as a DEX, but rather as a token issuance platform. This model can take two forms:
1. High-flow-rate launchers (e.g., Pump) for meme coins.
2. ICO platforms that enable on-chain capital formation for more legitimate projects (such as MetaDAO and Jupiter's DTF).
Starterboard
We've extensively covered launchboards in the past, emphasizing the importance of controlling user relationships through a prosumer-centric, mobile-first front end. However, one point we haven't explicitly addressed is that the surge in launchboards has disrupted passive AMMs to almost the same extent as active market-making AMMs, albeit through different pathways.
Active market makers (AMMs) have captured market share in short-tail assets. Meanwhile, launchpads have become the token issuance layer for long-tail assets, controlling the issuance and order flow of these assets. Evidence of this disruption is that the three major passive AMMs on Solana (Raydium, Orca, and Meteora) have all launched launchpad-related products in the past year.
Raydium:
After Pump launched its PumpSwap AMM and cut off Raydium's graduation token flow, Raydium responded with LaunchLab, a white-label solution that allows integrators to easily create their own launchboards. Raydium charges a 25 basis point program fee on the trading volume of any third-party launchboard built using LaunchLab, and the graduation tokens are redirected to Raydium's AMM.
Raydium's most prominent customer is Bonk. While LaunchLab briefly regained some market share through Bonkfun in July 2025, Pump maintains its dominance, consistently holding over 90% market share. LaunchLab has recently regained some share, but in the absence of a clear structural catalyst, historical patterns suggest that such growth is more likely sporadic than sustained.
Orca:
Orca has historically struggled to capture a significant share of meme trading volume.
Since 2023, over 50% of its monthly trading volume has come from the SOL-USD pair, with the remainder increasingly dispersed among project tokens, stablecoin swaps, BTC-USD, and hybrid tokens. This positioning has put Orca in a difficult position for over a year: it ceded its position to Raydium as Pump-driven meme coin issuance accelerated in Q1 2024; and the protocol's main bullish case (its dominance in SOL-USD and other highly liquid trading pairs) was also undermined as active market makers (AMMs) took over all short-tail liquidity. In July 2025, Orca launched the Wavebreak launchpad, marketed with "proprietary anti-bot technology," with DeFiTuna's TUNA as its initial offering. However, aside from initial post-launch attention, Wavebreak has seen virtually no activity since late August 2025.
Meteora:
Meteora operates in close collaboration with the Jupiter team, which has become the gateway for most retail users to conduct on-chain transactions. To expand its product range, Meteora partnered with Moonshot in August 2024 to introduce the launchpad.
In April 2025, Meteora launched a dynamic binding curve, a protocol that captures 20% of transaction fees from launchboard activities. Since then, the team has brought in new partners, including Believe, BAGS, and Jup Studio. Nevertheless, Meteora's launchboard activities appear to follow the same pattern as LaunchLab and Wavebreak. While there was a rebound through token issuance in the second and third quarters of 2025, usage has plummeted since September.
Pump:
As mentioned above, Pump remains the dominant startup board with significant advantages.
We've discussed this in detail in previous research, so here we'll focus on the most interesting aspects. Pump can be considered the first embodiment of the vertically integrated DEX theory; it's built from the top down, starting with issuance, not the other way around. After securing issuance channels and order flow through its launchpad, Pump introduced its passive AMM to capture downstream trading activity. This integration significantly diversifies Pump's revenue streams, moving beyond solely relying on the bond curve mechanism. As the chart below shows, Pump now monetizes activity across the entire token lifecycle, with AMM fees now contributing over 20% of its total revenue.
ICO platform
Over the past year, the punishment of low-circulation tokens in the liquidity market and a more favorable regulatory environment have jointly driven the resurgence of ICOs. Unlike memecoin launchpads driven by rapid token issuance and circulation, vetted ICO platforms, while also hoping for continuous issuance, place greater emphasis on the quality and reputation of founders, as well as the long-term retention of founders and investors.
MetaDAO:
We continue to maintain our argument for MetaDAO, believing it to be the best positioning protocol to win in this market. As we summarized in our September report: "MetaDAO is built from first principles and is significantly different from other solutions in the market. Notably, MetaDAO aims to solve one of the most important problems in the industry today: enforceable token holder rights."
Unlike launchpads, MetaDAO does not have a binding curve. Instead, it monetizes its ICO through swap fees on its Futarchy AMM and its LP positions on Meteora. The Futarchy AMM charges a 0.5% fee on trading volume, initially split equally between MetaDAO and the fundraising project (e.g., 0.25% to MetaDAO and 0.25% to Avici). On December 28, through mutual agreement with the team, the revenue sharing ratio was retroactively adjusted so that all 0.5% now belongs to MetaDAO.
Since the launch of the Futarchy AMM on October 10th, MetaDAO has generated $2.4 million in revenue, with approximately 60% coming from the Futarchy AMM and 40% from its Meteora LP positions. MetaDAO is perhaps the clearest embodiment of our "death of independent AMMs" theory. No one considers MetaDAO a true AMM. Nevertheless, the Futarchy AMM operates as the protocol's primary profit layer, thanks to MetaDAO's control over the token issuance layer and its associated distribution channels.
Jupiter and Meteora:
On December 3, Jupiter launched its decentralized token formation platform, with HumidiFi's WET as its first project. Projects launched through DTF must undergo a review and screening process by the Jupiter team, highlighting the methodological difference between high-flow launchpads and vetted ICO platforms.
WET's sale will be conducted in multiple phases on a first-come, first-served basis. The first two phases are priced at a fully diluted valuation of $50 million, while the public offering is priced at a fully diluted valuation of $69 million. Notably, Jupiter stated that future issuances may explore other sales mechanisms. After the sale concludes, any remaining allocations will be transparently locked using Jup Lock, and a liquidity pool will be immediately created on Meteora from a portion of the sale proceeds to ensure token liquidity.
Despite Meteora's unsuccessful efforts in the launchpad market, we believe its relationship with Jupiter positions it better than Raydium and Orca, giving it superior distribution channels and business development capabilities. For example, Meteora has been chosen as a preferred venue for high-profile token launches such as Trump or WLFI, even though the trading volume and revenue generated by these tokens are highly cyclical.
Valuation framework
While it's easy to value Solana DEX tokens based on historical price-to-sales ratios, such comparisons in isolation have limited practical value. Simply labeling an asset as the "cheapest" in its class ignores the fact that the Solana spot trading landscape is still rapidly evolving, and forward-looking growth will be determined by where trading volume consolidates, not where it has historically accumulated. Therefore, understanding the direction of market structure is a prerequisite for any meaningful valuation analysis. Furthermore, not all tokens are created equal; some tokens offer stronger protection for token holders than others.
For investors looking to capture upside potential from the Solana spot trading pattern, we see two main paths:
1. Active market makers (AMMs) should continue to solidify their share in short-tail assets . While the SOL-USD pair currently drives most of the trading volume, we expect AMMs to also dominate other categories that are becoming important for Solana in the coming months, such as tokenized stocks.
2. Possessing a token issuance platform with vertically integrated AMMs, where the AMM primarily serves as the profit layer for issuance. Depending on investors' expected risk exposure, this bet can be expressed through high-flow launchpads (such as Pump) or ICO platforms that enable on-chain capital formation (such as MetaDAO). Given the current market environment, we are more optimistic about the growth prospects of ICO platforms for legitimate projects.
Against this backdrop, it becomes increasingly difficult to justify a long-term bullish view for DEXs that do not belong to any of the above types (the most obvious examples being Raydium and Orca).
Price-to-sales ratio
The chart below shows the circulating market capitalization price-to-sales ratios of the tokens discussed in this report. The first notable conclusion is that RAY and ORCA have become more expensive over time (revenue declining faster than valuation), resulting in current P/S ratios of 10x and 14x, respectively. In contrast, PUMP and MET are trading at approximately 4x and 6x P/S, respectively, despite being better positioned in terms of issuance and growth prospects.
When estimating WET's price-to-sales ratio (P/S), we extrapolated HumidiFi's revenue by applying a 0.5 basis point (0.005%) commission rate to trading volume. While this assumption provides a directional reference for similar comparisons, the estimate is not entirely accurate as HumidiFi's actual price spreads can fluctuate significantly with market conditions. Within this framework, HumidiFi's P/S ratio is approximately 2.
META, with a price-to-sales ratio of approximately 36, is the most "expensive" token in its class—which precisely confirms our view that decisions should not be made solely based on historical multiples. We believe that given META's clear protection of token holders' rights and its forward-looking growth prospects, its premium over non-ownership tokens is reasonable. We have previously published a forward-looking valuation model for META.
However, META's current price-to-sales ratio of approximately 36 times is significantly higher than its historical average (around 15 times), indicating that the market is already pricing in a series of recent catalysts. META has risen by about 40% in the past week, driving valuation multiple expansion, while its recent revenue has actually declined over the past month due to a temporary slowdown in ICO activity. Looking ahead, the following developments are expected to drive a recovery in its revenue:
- Futarchy AMM's fee sharing percentage has increased from 0.25% to 0.50%;
- According to the Omnibus proposal, approximately 90% of META liquidity is being migrated from Meteora DAMM v1 to Futarchy AMM;
- The upcoming Ranger ICO (scheduled to launch on January 6, 2026).
These catalysts, along with the upcoming opening of licenseless issuance and STAMP mechanisms, are expected to help its price-to-sales ratio gradually fall back to a more stable range in the coming months as revenue returns to a growth trajectory.
Fully diluted valuation (FDV) to revenue ratio
On a fully diluted P/S basis, META and RAY are the most expensive in their class. As for Raydium, given its more challenging future trading volume trajectory and lack of sustainable control over the issuance layer, we struggle to justify its premium. In contrast, MET, WET, and PUMP have the lowest multiples in their class, at 12x, 9x, and 7x, respectively.
Adverse selection of liquidity tokens
Overall, we observed a median P/S of 8x and a fully diluted valuation/revenue of 15x. While these multiples may seem low at first glance, the main reason for the discount lies in the uncertainty surrounding token holder rights and supply dynamics.
Investors want to invest in businesses with strong fundamentals, but they also want assurance that holding tokens provides ownership of that business. Specifically, they want assurance that the team will act in the best interests of the project and token holders, and that the tokens provide a credible claim to remaining cash flows, assets, and legal recourse.
We believe META commands a premium relative to its peers because it is one of the few assets that simultaneously meets two criteria: a strong business fundamentals and an investable token with credible value accumulation. However, we expect the current P/S ratio of ~36x to converge to ~20x as revenue growth accelerates again in the coming weeks. Otherwise, the recent price surge will be more difficult to justify solely on fundamentals.
RAY is also an investable token. Raydium scores 38/40 in the token transparency framework, indicating that the project has fully disclosed its revenue sources, equity and token holder rights, advisory service providers, and core team members. It also has high liquidity, and the team uses a 12% swap fee to programmatically buy back RAY.
Raydium's problem lies in the fundamental disconnect between its high multiple relative to its peers and its growth prospects. Revenue is declining faster than its valuation, and in the absence of a clear structural catalyst, it's difficult to argue that this trend will reverse. It's worth noting that Orca faces similar structural issues to Raydium; while one can defend ORCA as an investable token, its growth prospects are similarly limited.
An interesting observation is that, aside from ownership tokens, the only credible signal from the teams conveying their concern for the tokens has been buybacks (RAY, PUMP, ORCA, MET) – even though this isn't the optimal use of capital. Pump has spent approximately $230 million to buy back about 17% of its circulating supply, yet the token is still trading at around 3x its historical P/S. Meanwhile, Meteora has spent approximately $12 million to buy back nearly 3% of its total MET supply, and the token's trading P/S ratio is slightly higher at 5x.
Even if you present compelling reasons for the growth prospects of Pump and Meteora as businesses, both tokens face challenges that could justify their discounted trading. Regarding Pump, it remains unclear how value is distributed between tokens and equity for public market participants, and whether token holders have rights to Pump's treasury. Regarding Meteora, approximately 7.2 million MET tokens are unlocked monthly as part of the team and ecosystem reserve allocation, which could translate into selling pressure. For example, at the current valuation of $280 million, these unlocks could potentially translate into $2 million in selling pressure per month.
Nevertheless, while the challenges faced by these two tokens may justify their discounted trading, the fact that RAY and ORCA are trading at more than double the price of PUMP and MET, with even lower growth prospects, may indicate market mispricing and present attractive opportunities for relative value pairings.
Finally, HumidiFi's WET faces a similar issue. HumidiFi is the dominant and fastest-growing DEX on Solana, and theoretically, WET is the only liquidity source for gaining exposure to an active market maker (AMM). However, investors have to (to some extent blindly) believe that the team won't abandon the token.
In terms of token utility, users will be able to stake WET to earn fee rebates, and the team has explicitly stated that "WET is not and should not be considered an investment." If the team's long-term interests are aligned with the token's, then you can easily argue that WET is currently undervalued, despite its low circulating supply. However, the problem is that public market participants cannot determine whether WET is a meme coin or an investable token with credible value accumulation. Therefore, its trading price is lower than it would otherwise be.
Nevertheless, given Temporal's quality and track record as a long-term builder in the Solana ecosystem, we believe the team is more likely to pursue growth and value accumulation consistent with WET. This is ultimately a subjective judgment and should be approached with due caution. Even so, on a risk/reward basis, we believe WET has greater upside potential than RAY, ORCA, PUMP, and MET, at least in the near term, before the unlock begins in June 2026.
risk
Each project for which we have a constructive view has a unique set of risks, outlined below:
- HumidiFi : As mentioned earlier, the main investment risk remains the lack of clarity regarding the accumulation of WET value. Besides token design, HumidiFi's competitive position in the active market maker (AMM) space also carries risks. To date, HumidiFi has benefited from Temporal's deep technical expertise and vertical integration at the infrastructure layer. However, a decisive advantage of today's AMMs is on-chain composability: because both the lag-based pricing venue and the AMM are on-chain, arbitrage can be executed atomically in a single transaction, significantly reducing execution risk. In this regard, Titan's recently introduced composable RFQ product may narrow the gap between RFQs and AMMs, potentially putting pressure on AMM market share in the coming months.
- Pump : Setting aside the token issues discussed earlier, Pump's dominance in the high-flow launchpad category is undisputed. A more relevant issue is the sustainability of its revenue, with a common concern being that memecoins may be in a long-term recession. On-chain data shows that despite overall market weakness, revenue has remained resilient over the past few days, hovering around $900,000 per day. However, this also raises questions about data quality and sustainability. Current binding curve activity still appears healthy, with approximately 1-2 million transactions per day. Nevertheless, there is growing skepticism about whether this demand might be externally subsidized, a claim that, while still speculative, undoubtedly adds to the uncertainty surrounding the long-term revenue outlook.
- MetaDAO : While we remain bullish on MetaDAO and consider it the most differentiated ICO platform, execution risks remain, particularly regarding the pacing of issuances. In our base case assumptions from September, we anticipated approximately five ICOs per month. As of now, more than a month after the last issuance, MetaDAO has no ICOs scheduled for December 2025. Nevertheless, Ranger ICOs should re-accelerate revenue growth. There has been ongoing debate within MetaDAO, both internally and publicly, about whether to maintain a fully screened model or experiment with permissionless issuances. We believe that while the latter carries the risk of lower project quality, it is a necessary experiment to increase throughput and validate platform scalability, and is likely the direction the team will ultimately choose. We also believe that Colosseum's STAMP will bring a consistent, high-quality issuance volume to MetaDAO, complementing permissionless issuances.
- Meteora : While Meteora clearly benefits from Jupiter's issuance channels, a key nuance is that the two protocols maintain separate tokens. Therefore, it's unclear how much of Jupiter's front-end-driven growth ultimately derives from MET rather than JUP. Even with highly aligned team interests, if Meteora remains primarily positioned as back-end liquidity infrastructure, while Jupiter captures the majority of user traffic and interface-level value, then MET's lower multiplier might be reasonable.
Final conclusion
This report outlines the current landscape of Solana spot trading. The core conclusion is that we expect the market to continue to diverge: active market makers (AMMs) will continue to dominate the short-tail, highly liquid market, while passive AMMs will increasingly focus on long-tail assets and new token issuances.
Both active market-making AMMs and passive AMMs can benefit from vertical integration, but in completely opposite directions.
Passive AMMs are moving closer to users through token issuance platforms (such as Pump-PumpSwap and MetaDAO-Futarchy AMM); while active market-making AMMs are extending upstream in the supply chain, focusing on transaction settlement services (such as HumidiFi-Nozomi). The losers in this trend will be traditional AMMs that have limited control over end users and lack a sustainable order flow driven by issuance.
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