vision-blog

Firefly was born out of a vision to push the limits of DeFi by making DeFi faster, less expensive, more accessible and technologically robust than ever before. The platform aims to onboard millions of users to open finance in the next five years and empower everyone connected to the Internet with frictionless access to markets.

In just over a decade since their inception, digital assets have reached a capitalization of over two trillion dollars, a fifth of the most treasured precious metal for millennia - gold. We believe this trend will continue to accelerate as DeFi becomes faster and more expressive and traditional assets start to have digital representations. Firefly is bridging the best of CeFi with the best of DeFi to advance derivatives trading, the largest market by trading volume. The latency, liquidity, and low cost of CeFi combined with the transparency, composability, and permissionless nature of DeFi make Firefly a convincing alternative to existing centralized exchanges.

More Performant DeFi: Sub-Second Settlement

Financial services in the traditional world appear smooth because they process on timescales comparable to the limit of human perception. The time from order creation to on-chain settlement on Firefly takes 400 - 800ms in ideal conditions, which appears instant for all human purposes and rivals the latencies in traditional finance. The tools we are building will be available for use to other projects within Polkadot and Moonbeam ecosystems. We will continue to push forward the performance and contribute to advancing blockchain scalability.

Cheaper DeFi: One Cent per Transaction

The price of interacting with traditional financial infrastructure is negligible and often not explicitly stated or hidden within other services. We aim to eventually make the cost of one transaction on Firefly less than a cent, enabling affordable access to markets for everyone.

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Revenue Share: Returning Value to Traders

Unlike centralized exchanges that capture the entire revenue generated by traders, decentralised apps allow for value flow back to users of the protocol. Based on their trading activity, traders receive rights to the revenue generated on the platform in perpetuity. The token holders determine the revenue-sharing mechanisms through decentralised governance.

Liquidity: Supported by Leading Market-Makers

Traditional high-frequency and market-making strategies provide liquid, efficient markets for almost every tradable asset under the sun. Several of the leading market-makers in the industry will quote markets on Firefly with tight bid-ask spreads to allow for opening and exiting positions with minimal slippage. Firefly aims to provide supreme liquidity for all assets voted-in by the governing stakeholders.

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Access: Empowering Everyone to Make Markets

Automated trading and market-making strategies are the backbones of liquid and efficient markets. To strengthen the markets on Firefly, deploying automated trading strategies will be made as easy as possible, even for non-technical users. To start, the integration with Hummingbot will allow traders to create and run high-frequency, arbitrage, and market-making strategies on the Firefly DEX. On top of that, users will be able to deploy capital into plug-and-play market-making bots. Lastly, Firefly will open-source its own atomic market-making algorithms to make access to markets even more effortless.

Security: Thoroughly-Tested Non-Custodial Contracts

Security is not only a priority but a prerequisite to building a performant, user-friendly DEX. We invest significant effort into producing sound code and frequently review it to ensure quality. While we believe we created resilient and reliable products, we also partnered with the best security firms in the industry to audit our work. The non-custodial smart contracts underpinning Firefly will be made open-source to allow anyone to audit the code, infer the contract logic and understand the inner working of the exchange. The Firefly platform’s security will benefit from the shared security of the Polkadot Relay Chain and the AnyTrust guarantee when rollup assertions are submitted to the Moonbeam chain; as long as even one validator is honest, the liveness of the rollup layer is preserved.

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Decentralisation: DAO From Day One

In place of company management staff, the DAO composed of token holders shapes the future of Firefly. Adding new markets, designing the fee structure, and managing the treasury are some of the critical responsibilities of the DAO. Token holders have a vested interest in making key decisions that benefit the exchange.

End-to-end Decentralisation (~12-16 months) Firefly is going to unveil one of the first fully on-chain trade mining programs. The exchange smart contracts will make Firefly entirely non-custodial from Day One. Over the next 12-16 months, we will progressively decentralise the order-matching engine to make the platform fully decentralised.