FLUID.finance and how AI can improve investment returns in DeFi

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In this episode of the DeFi Download, Piers Ridyard interviews Ahmed Wael Ismail, Founder and CEO of FLUID, an AI-based liquidity aggregator for CeFi and DeFi. In the interview, Ahmed discusses FLUID's liquidity aggregation platform and how it works to solve the problem of highly fragmented liquidity in the crypto market.

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Summary

FLUID is an AI-based liquidity aggregator for CeFi and DeFi. The platform provides a seamless and efficient solution for users to access multiple liquidity pools and execute trades at the best available prices. FLUID offers transparency and security. In addition, the FLUID team is working to expand the range of supported assets and liquidity sources, so that users can benefit from an ever-growing ecosystem of financial opportunities.

During the discussion, Ahmed explains that the biggest issue in cryptocurrency markets is the fragmentation of liquidity, which results in huge market inefficiencies and execution risk. FLUID aims to solve this problem by aggregating liquidity across centralised and decentralised exchanges using AI-based strategies. By doing so, they can minimise latency, provide best execution, and give users the best possible pricing at the best possible terms.

FLUID is primarily focused on institutional clients and exchanges, but also has a B2C strategy in place. The company plans to launch a token for retail users and expand into futures, options, and tokenized markets.

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Key takeaways

• Liquidity refers to the availability of tokens to purchase on exchanges.
• Liquidity aggregation solves the problem of highly fragmented liquidity in the crypto market, leading to market inefficiencies and high costs for buying and selling crypto assets.
• Smart order routing looks at all the order books to get the best possible price and the least slippage.
• FLUID uses AI to predict market latency and provide optimal execution by analysing complex and unstructured data.
• Best execution is a concept in financial markets that focuses on getting the best possible price for the investor.
• The accuracy of FLUID's AI-based strategies can predict BTC and ETH in up to 8 seconds with 99.5% accuracy and up to 30 seconds with 95% accuracy using hybrid models.
• FLUID's target users include institutions, exchanges, and retail markets.

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Chapters

[01:03] What is a liquidity aggregator and why do we need one?

[03:53] How does FLUID's liquidity aggregator work?

[08:38] Why does FLUID use AI in its liquidity aggregation?

[12:17] Why doesn't the FLUID team trade on it themselves?

[13:56] Why FLUID's type of liquidity aggregator is needed in the market

[15:21] Liquidity in decentralised vs. centralised exchanges and the role of liquidity aggregation in making execution more efficient

[19:09] The potential problem of liquidity aggregation in tier 3 and 4 exchanges: Liquidity mirroring and circular reasoning

[25:10] Who takes the execution risk when a price is quoted on FLUID? Is the exchange obligated to fill an order or is it just an offer that they will do their best to fulfil?

[27:23] Potential issues with executing transactions on decentralised exchanges: Delays due to Ethereum finality and the possibility of front running

[30:07] Status of development and launch timeline for FLUID

[31:50] FLUID's vision for the future of liquidity aggregators

[34:36] FLUID's customer base and how retail fits into the company’s vision

[36:55] Piers' closing remarks and expression of excitement for FLUID's potential value for the industry

[37:33] Where to find more information about FLUID

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Further resources

• Website: fluid.finance
• Twitter: @FLUID_liquidity
• Ahmed’s Twitter: @AhmedWIsmail
• Telegram: t.me/FLUID_liquidity

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