Binance Launch! FLY Protocol Airdrop starts today: cross-chain aggregator redefines DeFi value distribution with FLYwheel mechanism.

Written by: white55, Mars Finance

Introduction

At 21:00 on June 6, 2025 (UTC+8), Binance Alpha, the world’s leading crypto trading platform, will officially launch FLY tokens, marking the official entry of Fly.trade (FLY), which was renamed from Magpie Protocol. As the first underlying protocol to adopt the FLY(3,3) incentive model and realize cross-chain liquidity aggregation, FLY not only carries the mission of solving the liquidity fragmentation of the multi-chain ecosystem, but also tries to transform value capture from liquidity providers (LPs) to traders through the deep reconstruction of tokenomics, opening the flywheel effect in the DeFi 3.0 era.

1. Team and Financing: Cross-chain Infrastructure Backed by Top Institutions

The founding team of FLY Protocol consists of former Wall Street quantitative trading experts and native blockchain developers. CEO Ali Raheman has led the development of high-frequency trading systems, co-founder and CTO Gergely Hegyközi holds 7 patents in the field of cross-chain interoperability, while COO Ikram Ansari has spearheaded the commercial implementation of multiple DeFi protocols. This “finance + technology + operations” triad enables the project to possess algorithm optimization capabilities while being deeply aware of market demand pain points.

On the financing level, FLY Protocol demonstrates strong institutional appeal:

September 2022: Completed a $3 million seed round financing, led by Jump Crypto and Parafi Capital, with follow-on investment from Republic Capital and Sandeep Nailwal (founder of Polygon);

March 2025: Raised $1.6 million through IDO, with investors including GSR Markets, Apollo Capital, and others.

The total financing amount reached 4.6 million USD, with funds primarily allocated to protocol algorithm upgrades, cross-chain security verification module development, and ecosystem incentive pool construction.

The injection of institutional resources not only brings capital support but, more importantly, opens up deep cooperation with cross-chain bridges such as Wormhole and LayerZero. For example, its non-custodial cross-chain solution has integrated Wormhole’s 19-node guardian network, significantly enhancing the security of asset cross-chain transactions.

2. Technical Architecture: Four-dimensional Innovation Restructuring Cross-chain Trading Experience

The technical moat of FLY Protocol is built upon four core modules, directly addressing the two major ailments of current DeFi trading - liquidity fragmentation and cross-chain interaction complexity.

1. Liquidity Aggregation Engine: Deep scanning across 30+ chains

By aggregating 766 liquidity pools from 30 public chains including Ethereum, BSC, Polygon, Avalanche, and Sonic (including DEXs, lending protocols, and cross-chain bridges), FLY has built the first global liquidity network supporting non-standard assets (such as LST and RWA). Its self-developed dynamic routing algorithm can calculate the optimal path in real time, reducing the average slippage to 0.28% (industry average 1.5%) and saving 15%-40% in Gas costs.

2. FLYwheel mechanism: revolutionary iteration of the ve(3,3) model

The most disruptive innovation of FLY lies in its token incentive model. Traditional ve(3,3) models favor liquidity providers, while FLYwheel shifts 80% of the token emissions towards traders:

Trading Subsidy: Users who lock FLY as xFLY can receive trading slippage subsidies (up to 50% coverage), transaction fee discounts (up to 25%), and protocol revenue sharing.

Bribery Market: Project parties can pay bribes to xFLY holders to compete for FLY emissions to reduce their own asset trading friction;

Multiplier Decay System: The reward multiplier for early participants decreases over time, creating a balance between the “early bird effect” and long-term loyalty.

This design allows the growth in trading volume to directly drive token demand, forming a positive cycle of “trading volume ↑ → transaction fees ↑ → xFLY staking rewards ↑ → FLY locked amount ↑.”

3. Chain Abstraction Layer: CEX-level multi-chain seamless experience

FLY achieves “user-friendly” cross-chain interaction through technological innovations such as unified address format, automatic exchange of Gas tokens, and cross-chain state synchronization. For example, users can directly purchase JOE tokens on the Avalanche chain using ETH, with the system automatically completing inter-chain routing, Gas token conversion, and settlement, compressing complex operations into a single click. Testnet data shows that this feature has increased the transaction conversion rate for new users by 63%.

4. Security and Cost Optimization: Zero Trust Verification and Cost Compression

Using zero-knowledge proof (ZKP) technology to verify the validity of cross-chain messages reduces the risk of oracle attacks by 90%; at the same time, through batch transaction compression, optimal Gas prediction algorithms, and holder tiered discounts (FLY/WING dual-token model), the on-chain transaction costs are at the lowest level in the industry.

3. Product Progress: Ecosystem Expansion Behind the $4.8 Billion TVL

Since the mainnet launch in 2024, FLY Protocol has achieved key milestones:

Transaction Scale: Cumulative transaction volume of $4.8 billion, with an average daily interaction volume exceeding $19 million.

User Growth: The number of independent addresses reached 194,000, and the proportion of institutional users increased to 35% (including market makers and asset management platforms);

Ecosystem Integration: Become the default liquidity layer for emerging chains like Manta Network and Sonic, and collaborate with DEXs like FireFly to launch a $1 million liquidity incentive program;

Chain abstraction landing: In Q2 2025, support for high-performance EVM chains such as Monad and MegaETH will be added, and by Q4, it will expand into the Bitcoin ecosystem (through the Mstack protocol).

It is worth noting that the institutional adoption rate of FLY is significantly higher than that of similar protocols. For example, the high-frequency trading firm VRM has integrated its dark pool services with FLY, allowing users to receive large trading discounts by holding FLY, which brings them a steady flow of large orders.

4. Token Economics: Community-Led Value Distribution System

The FLY token adopts a deflationary economic model, with a total supply of 100 million (maximum supply of 106 million), and its distribution mechanism highlights the “community first” principle:

Community Incentives: 55.93% for trading rewards, liquidity mining, and governance participation;

Team and Advisors: 23.3% will be unlocked linearly over 4 years to ensure long-term interest alignment;

Ecological Fund: 15.43% allocated for strategic cooperation and developer funding.

The design of the value capture path is particularly exquisite:

Transaction fee distribution: 30% of the protocol revenue is used to buy back and burn FLY, and 20% is allocated to xFLY stakers;

Governance Power Premium: xFLY holders can vote to determine the emission weight of different on-chain liquidity pools, forming a triangular enhancement loop of “governance power-trading volume-token value”;

Cross-chain service premium: Using FLY to pay for cross-chain gas fees allows for tiered discounts, promoting token consumption in scenarios with rigid demand.

V. Expected Going Live: Three Major Factors Driving Value Reevaluation

The short-term value support of FLY is derived from the combination of the token model and market environment:

Airdrop Effect: The 88 FLY airdrop from Binance Alpha (requiring 223 points for redemption) may trigger a “sell pressure test,” but the high lock-up incentives of the FLYwheel (with an initial expected APY of 180%-250%) will buffer short-term fluctuations;

Ecological collaboration: Deep integration with the Sonic chain (its TVL has surpassed $8.5 billion) and the FireFly million-dollar liquidity program may lead to a surge in on-chain transaction volume;

Institutional Entry: Matrixport subsidiary Fly Wing obtains Singapore MPI license, which may drive compliant funds to configure cross-chain assets through FLY.

In the medium to long term, the value ceiling of FLY depends on:

Cross-chain market share: Currently, competitors like Polymer and LayerZero have a market share exceeding 60%. FLY needs to open up the Bitcoin and Cosmos ecosystem battlefield beyond EVM-compatible chains.

AI Integration Progress: The coupling degree of its low-latency architecture with AI trading strategies (DeFAI concept) may open new scenarios for high-frequency algorithmic trading.

Regulatory adaptability: The US SEC’s regulatory attitude towards cross-chain protocols is still uncertain, and the team’s Singapore compliance layout (such as MPI license) may become a key risk mitigation point.

Conclusion

The birth of FLY Protocol marks the transition of cross-chain liquidity aggregation from “multi-chain coexistence” to “unified market”. It binds the value of the token to the real transaction demand through the FLYwheel mechanism, which may reshape the value distribution paradigm of DeFi. Despite the challenges of security verification costs and competitor encirclement, FLY is expected to become an infrastructure-grade asset in the multi-chain era with a clear token model, top-level institutional endorsements, and early-stage ecological potential. For investors, it is necessary to pay attention to the adoption rate of its chain abstraction technology, the xFLY staking rate, and the activity of the cross-chain bribery market, which will be the key indicators to judge whether the flywheel effect is formed.