DFlow will look to utilize the funds to grow the project and oversee a launch on Solana mainnet by Q2 of 2022.
DFlow Outlines Immediate Future
The move was confirmed in a press release exclusively shared with Web3Wire that documents the participation of the likes of Cumberland (DRW), Parataxis Capital, and PetRock Capital. DFlow has already outlined plans to use the funds to onboard institutional market makers, support partnerships with sources of retail order flow, and launch the protocol on Solana mainnet in Q2 2022.
“The DFlow protocol is bringing payment for order flow to decentralized markets in a way that provably safeguards retail traders by cryptographically guaranteeing best execution on each trade for the first time,” said Nitesh Nath, founder, and CEO of DFlow. “The DFlow protocol aligns incentive structures between retail traders and institutional market makers: traders avoid expensive trading fees, earn rebates, and always receive the best execution, while market makers receive private retail order flow at fair prices. It’s a win-win for all parties involved.”
Aligning the incentive structures between retail traders and institutional market makers provides important value in an industry where it is much-needed.
What Does DFlow Offer?
The team explains that payment for order flow (PFOF) is an incentive system that compensates order flow sources, such as brokerages in traditional markets, for directing their orders to a particular market maker. This financial primitive did not exist in crypto because it was previously impossible to segment retail orders from toxic orders within decentralized order flow.
DFlow protocol will directly address this issue by implementing programmatic incentive structures that strongly encourage retail flow sources to route their order flow through the protocol while discouraging institutional takers from submitting toxic order flow.
“DFlow is the only infrastructure for decentralized payment for order flow (PFOF) markets. As crypto-trading enthusiasm grows, we expect a new crop of exchanges to compete on price, execution, transparency, and rebates—all things that DFlow offers out of the box,” said Kyle Samani, Managing Partner Multicoin Capital.
This new crop of DFlow powered decentralized exchanges (DEX) will rely on the fact that through DFlow, price fairness is programmatically enforced at the protocol layer. Although the first of these DEXs are set to arrive in Q2 of 2022, they will immediately look to offer traders an attractive rebate for their order flow and will be the first DEX to leverage the DFlow protocol.
The team has already stated that developers interested in building a new exchange, aggregator, or another source of order flow can also build on the DFlow protocol today. We can also reveal that the project will be completely open-source on GitHub at the time of mainnet, and the contracts are live on Solana’s DevNet today.
The key factor in this successful raise is the value DFlow brings to users and the industry at large; with DEX developers alerted, the future could be very bright for DFlow.
What is DFlow?
DFlow is the first decentralized protocol for order flow markets. Using a combination of tokenomics and broad system design, the protocol leverages programmatic incentive structures to segment non-toxic order flow, improve capital efficiency, and unlock novel trading strategies in DeFi. DFlow was developed by an experienced team of quantitative researchers, engineers, and traders that spun out of DRW Trading Group, Apple, IMC Trading, and more.
Where to find DFlow:
What is Multicoin Capital?
Multicoin Capital is a thesis-driven investment firm that invests in cryptocurrencies, tokens, and blockchain companies. Crypto networks and companies will create trillions of dollars of value over the next decade. But investing in tokens is fundamentally different than investing in companies. New tools, heuristics, and security measures are needed to invest responsibly in this ecosystem. Multicoin Capital leverages its deep understanding of blockchain technology and crypto markets to deliver exceptional returns.
To find out more on MultiCoin Captial, visit their website.