PropAMMs: the good and the bad, and how to keep trustless infrastructure competitive

PropAMMs promise efficient onchain liquidity by combining fast offchain pricing with custom execution that updates quotes before swaps. While innovative, PropAMMs introduce opaque and trusted architectures.

Disingenuous operators have abused these architectures to spoof quotes—offering a fake price that changes during execution to extract higher spreads. We present a case study of how Gyroscope pool architecture was abused for spoofing, complementing related work by 0x.

This talk breaks down PropAMM mechanics and evaluates their liquidity impact. Using theoretical models and empirical data, we analyze whether PropAMMs deliver lower spreads. While liquidity may improve in theory, PropAMMs in practice often lead to worse execution.

We examine how DEX aggregators can guard against disingenuous operators and share design patterns for decentralized alternatives. These blend PropAMM performance with trust-minimized AMM guarantees, opening LP participation while mitigating operator risk.

Speakers: Ariah Klages-Mundt, Tammy Yang

Track: Users, Builders, and Agents