This section explains common questions in simpler terms and fewer words.
What is DFlow?
DFlow is an order flow marketplace for crypto-native brokerages to sell order flow to a network of professional market makers in a transparent and decentralized way. The DFlow Protocol defines an open and fair PFOF model that determines how and at what price order flow is sold.
Think of DFlow as a B2B version of Amazon and DFlow Protocol as the backend of Amazon that determines how products are listed, sold, and fulfilled. On DFlow, the product transacted is order flow.
What is order flow?
In DFlow's context, order flow are unfulfilled buy and sell orders originated on on-chain trading platforms from retail traders and investors. For example, Alice placing an order to swap 100 SOL for 1500 USDC on a crypto-native brokerage.
Note, token swaps submitted on decentralized exchanges are not relevant to DFlow. DFlow, like Uniswap, is an order execution layer. See question below.
What is a crypto-native brokerage?
A broker is generally defined as an individual or entity who offers a service. A crypto-native brokerage includes wallets, aggregators, dashboards, and basically any on-chain venue for spot token swapping.
In crypto, a brokerage is less defined because individuals can directly trade on exchanges like Uniswap and Curve. In the traditional stock market, users can't directly trade on NASDAQ or NYSE.
Why sell order flow on DFlow?
In addition to monetization, brokerages sell order flow (i.e. route orders directly to market makers) to access best execution services for their users. Professional market makers source liquidity from various public and private venues. The nature of retail order flow allows market makers to provide prices better than the best market price in the form of price and size improvements.
In addition, brokerages using DFlow can provide zero-fee trading and zero slippage trades.
How to buy or sell order flow?
Order flow sources sell order flow by batching and tranching orders into DFlow order flow auctions. Market makers buy order flow by placing bids into auctions. The winner receives the right to fill the order specified in the auction.
Is DFlow a price aggregator?
DFlow is not a price aggregator in the sense it's not built on top of other exchanges and does not route user orders to exchanges. However, brokerages that integrate with DFlow can access liquidity by making requests to the DFlow API. The DFlow API fetches prices from a network of professional market makers, who may also source liquidity from decentralized exchanges. Market makers are like price aggregators themselves because they are incentivized to actively seek best prices.
Does DFlow support order flow from many chains?
DFlow is built to have the flexibility to support order flow from any Layer 1 blockchain like Ethereum and Solana.
Do brokerages pay a fee to use DFlow? What are the initial costs?
DFlow does not charge a fee for brokerages to take liquidity. DFlow charges a flat fee in USDC for auction creation. This is the only cost.
About DFlow Chain
What is the DFlow Chain for?
The DFlow Chain is an appchain built using the Cosmos SDK and its sole purpose is to host DFlow order flow auctions. The DFlow Chain is optimized for this specific use case, meaning it should not be thought of as a generic Layer 1 blockchain.
Do retail traders need to transfer assets to the DFlow Chain?
No, retail traders placing orders on trading platforms powered by DFlow do not need to transfer assets to DFlow Chain. In fact, retail traders are completely abstracted away and do not need to worry about signing additional transactions.
How to transfer USDC to the DFlow Chain?
Order flow sources and market makers need to transfer USDC to create auctions and bid into auctions, respectively. They can do so by using the DFlow USDC Bridge. Deposits and withdrawals should be completed within minutes.
How to "use" DFlow?
Order flow sources use DFlow to receive best execution for their users and monetize their order flow in a competitive way.
Before routing orders, order flow sources must:
- Set up an endorsement server
- Create order flow auctions on DFlow
See details by heading to the Overview page.