Thread by @DFlowProtocol

1/ Today DFlow is officially on Solana mainnet, and we’re excited to introduce the first DFlow-powered app: @TsunamiExchange!

dflow.net/blog/mainnet-l…

2/ Head here for a more in-depth overview of Tsunami or read on to find out more about DFlow.

https://twitter.com/TsunamiExchange/status/1563241337708679169

3/ So what's DFlow, again?

DFlow is the protocol standard for open, provably-fair, and decentralized payment-for-order-flow (PFOF) in crypto. Open and fair PFOF brings significant improvements that are essential for well-functioning digital markets.

4/ As a reminder, PFOF refers to market makers purchasing retail orders from brokerage firms and filling their orders. What DFlow brings to crypto is a step away from the opaque system seen in traditional equities.

5/ Open and fair PFOF markets mean execution quality, price, and size improvements are measurable and verifiable by anyone.

6/ What does this all mean for retail traders and crypto-native brokerages like wallets and DeFi apps?

First, let's take a look at some common pain points retail traders experience.

7/ 🔼 High swapping fees. Popular swapping tools typically charge 20 to 85 basis points. Some hide this through clever UX and marketing, but end-users always end up paying them.

8/ 🏃‍♀️ MEV and front-running. MEV attacks are frequent on most popular swappers and are effectively hidden costs. These malicious actors take advantage of retail who aren't familiar with these concepts (e.g. slippage).

9/ 🥷 Poor and opaque price execution. Price slippage is another form of hidden cost carried by retail traders.

10/ DFlow is reinventing the retail trading experience for simplicity and savings 😎

🆓 Users pay 0 basis points on DFlow-powered apps
❌ Order encryption prevents front-running
💎 Guaranteed best-execution from institutional market makers

11/ On the other hand, wallets and crypto swapping apps can monetize their retail volume by routing to DFlow and receiving market maker rebates 🤑

12/ Now, how do market makers purchase order flow on DFlow?

Market makers, in fact, purchase the right to fill future order flow in parallel, sequential auctions held on-chain by DFlow.

13/ The right is granted to the owner of an order flow contract, a DeFi primitive native to DFlow that represents a batch of future order flow of a specific grade. Since orders don't exist yet, market makers can't delve into (or exploit) order details 😮‍💨

14/ In this process, market makers price order flow based on contract specs (e.g. token pairs, notional sizes) and the best-executing market maker purchases the contract at an auction-discovered price 🔍

15/ DFlow is designed to programmatically require market makers to fill within a governable threshold of the best price, as determined by a decentralized price oracle (@PythNetwork).

16/ DFlow is excited to contribute to the Solana ecosystem and shape, for the better, the way retail volume transacts on-chain.

17/ Okay, enough with the theory. Head over to @TsunamiExchange to see DFlow in practice 🤯