We are delighted to announce Conditional Liquidity, a mechanism that will provide a step-function improvement in the trading experience on Solana for retail takers and Solana DEX LPs.

Today, we are also releasing access to Clearpools, the first Solana Conditional Liquidity DEX, as well as a new DFlow Swap API feature called Declarative Swaps.

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A New LP Framework for Solana DEXs

Today, trading on Solana leaks significant value to malicious network actors that frontrun and sandwich user trades. These are problems not unique to Solana; decentralized market structure is difficult to build correctly.

Liquidity providers, ranging from AMMs to low-latency market makers, offer an important service to the network, and take on risk by committing to quotes onchain. However, as the Solana leader rotates, malicious MEV actors obtain privileged network positions that allow them to choose the ordering of transactions that affect state transitions at the expense of LP yield and Solana retail taker order flow execution quality.

We identify the high-level issue as a state mispricing problem: DEX protocols do not have variable application-layer pricing for the different types of market participants that access the state. With the current set of tools available to DEXs, they are unable to introduce this variable pricing, because they are unable to identify bad actors.

These issues hinder growth of Solana DeFi.

We believe the solution to these problems is multi-pronged. We are excited to release a mechanism for one of the critical pillars of the multi-pronged solution. The introduction of Conditional Liquidity (CL) changes this, today. With CL, DEXs are able to express a broader set of just-in-time preferences onchain.

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Conditional Liquidity

Currently, DEXs offer a single spread to the public market. With CL, DEXs are able to express a gradient of spreads to different takers based on how likely those takers are to adversely select the DEX.

CL Achieves this through the introduction of a new class of market actors known as Segmenters.

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Segmenters

Segmenters are a new class of market actors that receive economic upside for assisting with applying the DEX protocol fee gradient to order flow. Segmenters fundamentally attempt to recognize the toxicity of flow, and correct the spread charged to the order flow.

DEXs must define the tightest spread they offer to non-toxic order flow, and cede control of the difference between the wider public spread and the tighter non-toxic spread to Segmenters. With this spread-setting privilege, Segmenters set the spread difference to order flow that passes through them to the DEX, capturing a portion of it for themselves, while passing the rest on to the wallet and trader.

Today, the DFlow Aggregator is the first Segmenter. DFlow Swap API exposes conditional liquidity access to Solana trading application developers today through new Declarative Swaps.

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Clearpools

Clearpools forks the high-quality, open-source Orca codebase, and adds Conditional Liquidity mechanisms to the swaps.

Clearpools is the first CL DEX, that quotes tighter to non-toxic order flow, and is available for LP deposits today.

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Declarative Swaps

Declarative Swaps are an intention-driven trading mechanism offered through DFlow Swap API. Declarative Swaps allow Solana traders to trade with less slippage, reduced latency to transaction landing, and significantly reduced sandwiching risk.

DFlow Swap API is available to wallet developers interested in offering Declarative Swaps to their users today.

Solana traders can also utilize these new trading mechanisms through DFlow Desktop Swap.

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Future

The introduction of Conditional Liquidity, Segmenters, and Declarative Swaps marks a new chapter in the story of Solana’s DeFi evolution. These mechanisms will enhance the trading experience for traders ranging from retail, to AMMs, semi-automated market makers, and CLOB makers.

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Wallet Integrations

If you are a Solana wallet, get started with DFlow Swap API today.

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DEX Integrations

If you are a DEX, please get in touch today to begin the Conditional Liquidity integration, and get aggregated by the DFlow Aggregator.