After Aster, HumidiFi protocol rises on demand for dark pool trading

The rise of Aster DEX revived other protocols offering similar services. Demand for dark pool trading awakened Solana’s HumidiFi, surpassing Orca and Meteora in the past few days. 

HumidiFi rose to the top 3 of Solana protocols, on rising demand for dark pool trading. Following the success of Aster, the protocol gained attention, surpassing Orca and Meteora. The dark pool model, also known as proprietary market maker, is gaining on the fully transparent public order DEX, as well as concentrated liquidity pools.

The dark pool DEX achieved $8.55B in trading volumes for the past week. On September 25, the DEX achieved an all-time record of $1.91B in daily volumes. HumidiFi rose alongside ZeroFi and SolFi, though those markets are now lagging, with ZeroFi volumes near an all-time low. 

During peak Solana trading periods, HumidiFi has risen up the ranks of DEXs. The exchange has carried up to 15% of Solana on-chain trading volumes, even without opening a front-end to retail trades. 

HumidiFi acts as a proprietary, closed pool with a single market-maker. The DEX is not permissionless, but its liquidity, spreads and slippage are controlled. HumidiFi is used to make orders for the most liquid pairs, especially SOL/USDC.

HumidiFi dark pools prevent sandwich attacks

Solana has allowed dark pools as a way for institutional trading, as well as a tool to disable sandwich attacks. The network still undergoes front-running by bots, extracting over $4M in 10 days. 

Raydium remains the leading DEX on Solana, still driven by retail activity. However, whales and other professional traders aim for minimal slippage and available liquidity that does not register through on-chain analysis. 

Previously, transparent exchanges have led to whale-tracking, as well as aggressive counter-trading. In the case of Aster and HumidiFi, the trading pools remain fully veiled, though they still produce significant volumes. 

Dark pools boost Jupiter volumes

The recent rise in DEX activity boosted Jupiter, based on its direct DEX involvement and its own perpetual futures market. Jupiter itself offers options to select one of the available automatic market makers, giving exposure to the available dark pools that lack a direct front end.

However, Jupiter is also the key router for the dark pool orders. Some of the recent Jupiter activity reflects the hidden effect of HumidiFi, which operates directly, even without a front end. Jupiter still has significant inflows of meme token orders, but HumidiFi is the key source of SOL/USDC requests for routing. 

During the busiest days, HumidiFi takes up to 80% of SOL/USDC requests on Jupiter. SolFi is also highly active, along with smaller dark pools. 

Dark pool activity picked up as SOL briefly dipped under $200. In the new week, SOL recovered to $208.22, with additional USDC inflows in the past week. 

Demand for SOL/USDC trading increased as the stablecoin supply rose to 13.79B tokens, up 7.15% in the past week. Of those tokens, USDC supply is 9.65B, up around 10% in the past month.