DFlow, a decentralized finance (DeFi) protocol, recently announced a successful $5.5 million financing round handled by renowned crypto venture capital firm Framework Ventures. Investing entities in this round led by Framework Ventures, including Coinbase Ventures, Circle Ventures, Cumberland, Wintermute Ventures, Spartan Group, and ZeePrime, among others, have raised this new capital to bring purchase order flow to crypto. The project has previously raised a seed round of $2 million in early 2022.
The concept behind the DeFi protocol of DFlow is to provide market makers with the facility to purchase order flow directly from different wallet applications. The order flow will be provided with assurance of allowing a market maker to uphold the best prices available by aggregated sources, centralized and decentralized exchanges.
At present, trading in the cryptocurrency domain is quite costly for retail customers, and the execution capabilities of exchanges lack the performance level of traditional equities markets. As a result, DFlow is introducing its open finance protocol that would serve as the link between regular retail customers, wallet applications, and market makers.
This system of finance, similar to traditional equities markets, is applicable to brokerages such as Robinhood (HOOD) as well. Institutional market makers such as Citadel, purchase order flow from retail customers, with a practice known as payment for order flow. Similarly, the virtual version requires the market makers to place their bids on wallet applications to generate revenues from trades conducted through the wallet.
The blockchain technology used by DFlow in this process would provide significantly improved transparency with regard to payment for order flow. Moreover, all the activities would be visible on-chain and controlled by smart contract platforms. Furthermore, an open-source reputational tracking algorithm would be incorporated to allow users to view the criteria used to select market makers. The introduction of such a protocol of finance would enable regular retail customers to get the best rates of fees and execution quality from market makers.
Alexander Taylor
- 2023-04-25
DFlow Aims to Introduce Open Finance Protocol for Crypto Trading
DFlow has raised a financing round of $5.5 million to bring purchase order flow to crypto. The blockchain technology used by DFlow would provide improved transparency with regard to payment for order flow, where an open-source reputational tracking algorithm would be incorporated to allow users to view the criteria used to select market makers.
