FairFlow is not just a technical upgrade – it is a statement that 'DeFi should be fair.' Kyber is ahead while the market is still struggling between user benefits and system benefits.
1. What is Kyber Aggregator missing – Why FairFlow is needed
- @Kyber Network The aggregator is already one of the leading platforms in the DEX aggregator space. But there is a common industry problem: profits from arbitrage (MEV) often flow into the hands of bots, rather than returning to LPs.
- This means that LPs, despite earning transaction fees, still miss out on a significant value known as Opportunity Value Loss. Other competitors like 1inch or Matcha have not thoroughly resolved this issue.
=> Kyber excels in routing technology, but if it does not retain this value for LPs, it still 'lacks a piece.' FairFlow is that missing piece.
2. What is Kyber's FairFlow?
- FairFlow is a Swap Hook mechanism directly integrated into the KyberSwap Aggregator. It allows LPs not only to earn transaction fees but also to share in the profit from arbitrage – called Equilibrium Gain (EG).
- The difference is that LPs do not need to stake or lock up capital. They can still maintain liquidity in Uniswap V4, farm elsewhere, and simultaneously earn additional profits from FairFlow.
3. The mechanism and advantages of FairFlow
- When users swap, KyberSwap will check the FairFlow pools. If this pool has a better price, the transaction will go through there.
- The FairFlow hook will retain the profit margin (EG) instead of letting MEV bots capture it.
- EG is then redistributed to LPs.
- Distribution method:
70% of the profit returned to LPs according to liquidity ratio.
30% used for ecosystem development.
- EG is aggregated off-chain, paid weekly, with no additional gas costs.
=> The biggest advantage: LPs retain capital flexibility while gaining additional passive income.
4. How to participate in earning profits on FairFlow
- Step 1: Provide liquidity to pools that support FairFlow.
- Step 2: Hold LP tokens. No need to stake, no need to move capital.
- Step 3: Check weekly and receive shared EG.
=> Simple, safe, and does not create additional contract risks.
5. The potential of Kyber if FairFlow succeeds
- Attracting quality liquidity: LPs will choose Kyber over others for better profits.
- Increasing trading volume: As liquidity increases, trading also increases, leading to positive effects for the ecosystem.
- While other aggregators only optimize prices, Kyber adds a new layer of value – sharing real benefits for LPs.
=> Laying the foundation for a new standard in DeFi: If FairFlow expands to many AMMs, it could become the new standard: LPs not only earn fees but also capture MEV.
6. Personal conclusion
- FairFlow is not merely a technical feature, but a strategic advancement. It addresses the inherent injustice in DeFi: LPs invest capital but are 'bloodsucked' by MEV.
- If FairFlow succeeds, Kyber will not only be a good price aggregator, but it will also become a place that protects and optimizes benefits for LPs. That is the way to build a sustainable and fair ecosystem.
