Archer Exchange Launches CLOB Amidst Prop AMM Spoofing Concerns

A new player joins the Solana DeFi landscape, with Archer Exchange opening public beta access to its emerging CLOB DEX.

The launch comes amidst growing mistrust towards prop AMMs. Despite offering unprecedented onchain capital efficiency and rivalling CEX execution, traders have expressed concerns over quote spoofing among leading prop AMMs.

Can CLOBs and pAMMs coexist in a thriving DeFi economy?

A New CLOB DEX Joins Solana DeFi

Archer Exchange, an emerging CLOB-based DEX, has opened access to its beta application to the general public. Promising to rebuild onchain orderbooks from first principles, Archer brings a creative approach to CLOB design that the team has coined “sovereign orderbooks”.

In existing DeFi order books, Archer Exchange claims that all market makers are required to write transactions to the same order book account. On Solana, only one transaction can be written to an account at a time. In periods of high network activity this design is susceptible to congestion, creating a bottleneck as makers boost priority fees to push through transactions to update quotes and orders.

Archer Exchange asserts that Sovereign Orderbooks provide an efficient solution to this problem. Under Archer’s design, traders create their own personal order book using an individual onchain account. While takers can fill orders from any account, makers no longer need to compete with each other to update orders in times of congestion.

Additionally, Archer Exchange contends that market maker updates in its design costs a mere 200 CUs (compute units). 

Co-founder Dhrumil argues that this is ~200x more than takers using the same priority fee budget, effectively prioritizing order cancellation and protecting market makers against toxic arbitrageurs seeking to pick off stale orders. 

Prop AMMs Under Fire for Quote Spoofing

Long considered a foundational design in TradFi markets, CLOBs are enjoying a renaissance in DeFi markets. Between the success of CLOB-based decentralized trading platforms like Hyperliquid and concerns around order spoofing among Prop AMMs, Solana DeFi users are expressing newfound interest in order book trading.

While less user-friendly than the highly simplified process of swapping tokens via  DEX aggregators, CLOB advocates argue that order books remain the superior trading mechanism. 

Despite the prior dominance of prop AMMs, there’s an argument that onchain trading activity is starting to reflect this thesis.

After a strong start to the year, daily prop AMM volume share has declined from 65.19% to 50.85%. During the same time frame, orderbook based exchanges have doubled their influence in onchain markets, with market share rising from 2.04% to 5.06%. Manifest currently leads Solana order books, recently recording over $12B in cumulative trading volume.

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