Intro

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Problem

PropAMMs are growing rapidly and are able to provide CEX-grade pricing onchain, but they’re all silo’d, have to be treated as block boxes, and liquidity is fragmented. This means:

• it’s impossible to perfectly split a trade across multiple pAMMs - aggregators have to simulate offchain combinations of 25% to A, 75% to B, then try 50% to A, 50% to B etc. The split is never optimal and is therefore never the best price for the user
• the split route is determined offchain and is typically stale by execution time, so again never the best price for the user
• it’s expensive in gas costs to constantly update, making it uneconomical for many pairs
• each pAMM has to do manual integrations with every aggregator
• they never get access to Uniswap retail flow

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HyFi

Short for Hybrid Finance, HyFi is effectively a proprietary-AMM (propAMM) platform built on top of Uniswap v4 (went through the Uniswap Hook Incubator). The name reflects what it is: a hybrid exchange (not a classic CEX or AMM DEX) that gets the best of both worlds. MMs interact with an offchain CEX-like orderbook, that book is then aggregated and put onchain very cheaply for traders to trade with in. Traders trade with it in a similar way to trading with Uniswap - all onchain without needing to first deposit tokens somewhere. HyFi is not an RFQ system.

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Market Makers

MMs only interact with the offchain orderbook with an API just like any CEX. This allows them to:

• avoid toxic flow by constantly updating their orders/pricing for free, allowing tighter spreads, which brings even more flow
• greatly reduce their costs vs running their own propAMM
• abstract away all onchain interactions and use the same system for every chain
• benefit from Uniswap retail flow (since we’re a UniV4 hook)
• benefit from more flow than they’d get on their own since flow prefers the place it can get the best pricing via shared liquidity
• immediately get the flow from all aggregators already using HyFi instead of manually integrating each one

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Traders

Traders only interact with the aggregated onchain book in the same way they would interact with a regular AMM, except the liquidity on HyFi is the combination of all pAMMs in one place. The book is walked at the time of execution. This allows them to:

• get CEX-grade pricing
• get the price that’s the best at the time of execution (instead of a stale route)
• get the best price from shared liquidity - effectively splitting the trade across many MMs in the mathematically perfect way
• have the same trading UX they have with Uniswap which users clearly prefer - including being able to trade without first depositing tokens, enabling maximum composability