At Mantis, we see orderflow as the oil that keeps the machine running smoothly - without orderflow, operations come to a screeching halt.

In short, orderflow involves all of the trades on any given market. The more orderflow there is, the more liquidity there is. This means that transactions happen more efficiently for users. More orderflow also means more earnings opportunities for other entities in a marketplace, such as solvers.

Keep reading to find out how we break down the definition of orderflow for both TradFi and DeFi. We also explain why cross-chain orderflow is especially important, and explain our steps to ensuring significant orderflow on Mantis.

Defining Orderflow in TradFi

In traditional finance (TradFi), orders are instructions to a broker or firm to buy or sell a security on behalf of an investor. Orders can contain information including:

• A specified price

• Timing of the trade

• Any conditions on the trade occurring or being canceled

There are many types of orders in TradFi. The three main types are:

• Market Orders: An order to buy or sell at the current market price.

• Limit Orders: An order to buy or sell at a specific price or better.

• Stop Orders: An order to buy or sell at a specific market price known as the “stop price”.

Orderflow can then be defined as all of these buy orders (bids) and sell orders (asks) combined.  This means that orderflow is the sum of supply and demand in a particular market.

Importantly, orderflow is valuable. In TradFi, brokers or firms derive value from orderflow by charging fees to investors.

Defining Orderflow in DeFi

Orderflow in DeFi is very similar to orderflow in TradFi: it is the sum of all orders or trades (that later become finalized transactions) within a particular market. For example, the orderflow on Uniswap v2 would be all orders on that exchange.

Like in TradFi, orderflow in DeFi is very valuable. When orderflow flows through a particular DeFi market, actors in that marketplace have the opportunity to earn rewards and fees for interacting with that orderflow. For example, on Mantis, users will pay a fee to have their intents settled into finalized transactions. All intents on Mantis comprise orderflow. Solvers on Mantis are able to earn rewards for optimally solving and executing user intents.

Orderflow in DeFi is also valuable as it brings liquidity into a particular market. For example, users of Osmosis bring liquidity to the platform in the form of assets they are looking to exchange. The liquidity from one order can then be used to form the other side of the trade on another order. Ample liquidity (thanks to ample orderflow) on a marketplace helps to ensure trades go through effectively and at a reasonable time and price.

The Importance of Cross-Chain Orderflow

As we have explained, orderflow is clearly very important in DeFi in general. We would argue that orderflow is even more important in cross-chain DeFi. That is because the cross-chain DeFi space opens up a plethora of new opportunities for users - some of which can be quite valuable.

Yet, users will not be able to capitalize on cross-chain opportunities without a number of prerequisites in place:

• Cross-chain bridging: Users need a secure mechanism to bring assets between different ecosystems, such as the IBC bridge delivered by the Picasso Network.

• Cross-chain applications: A cross-chain application like Mantis allows users to tap into the expanse of cross-chain DeFi from one location.

• Cross-chain liquidity: Cross-chain liquidity (resulting from cross-chain orderflow) is necessary to facilitate user trades between different ecosystems.

Because cross-chain liquidity is so essential for cross-chain trades to be executed, Mantis is working hard to bootstrap orderflow on its protocol. For example, we have partnered with bloXroute to process their orderflow between Ethereum and Solana. We also have a number of other collaborations in the works to ensure that there is ample cross-chain liquidity on Mantis. As a result, user intents on Mantis can be processed quickly and effectively. This will allow users to capitalize upon the best available cross-chain opportunities without interruption or delay.