KyberSwap Launches FairFlow to Return Arbitrage Profits Back to Liquidity Providers

Provided by PR DESK

September 19, 2025, 10:21AM EDT

UPDATED: October 22, 2025, 11:53AM EDT

The Block is hosting this content as a convenience for our readers. The Block does not necessarily endorse any of the statements made within the following announcement.

Quick take:

In short, LPs in FairFlow earn multiple yield sources: Fee + Equilibrium Gain + LM Rewards
In traditional AMMs, liquidity providers (LPs) lose opportunity value from arbitrage, which is captured by external arbitrageurs.
FairFlow by KyberSwap is a swap hook built on Uniswap v4 and similar protocols that redistributes these arbitrage profits - called Equilibrium Gain - back to LPs.
FairFlow is now live on Base and Ethereum, with 500,000 KNC in Liquidity Mining Rewards.

FairFlow by KyberSwap is a swap hook that enhances liquidity pools, built on Uniswap V4 and similar protocols. It is designed to help LPs earn additional yields from arbitrage value besides LP fees – while maintaining top-tier security.

Liquidity Providers Lose Arbitrage Value to Bots

In traditional AMMs, beyond impermanent loss, LPs also miss out on another source of value created by arbitrage activity.

When pool prices fluctuate, arbitrageur bots step in to rebalance the pool and capture profits generated from LPs’ liquidity.

If LPs could rebalance the pool themselves, they would be able to capture this value and convert it into additional yield. However, this value is now lost to external arbitrageurs.

FairFlow Redistributes Arbitrage Value Back to LPs

KyberSwap has launched FairFlow, a mechanism designed to redistribute arbitrage profits - referred to as Equilibrium Gain - back to liquidity providers, rather than allowing them to flow to external arbitrageurs.

This is made possible because the KyberSwap Aggregator is the only taker for FairFlow pools, blocking external arbitrageurs from fully extracting value.

On the security front, FairFlow does not interfere with LPs’ funds. The hook only adjusts taker logic, leaving liquidity untouched within Uniswap V4 and similar protocols. The code has also undergone an audit by blockchain security firm Omniscia.

As A Result, FairFlow Delivers Proven Higher APRs for Liquidity Providers

KyberSwap has run multiple experiments with FairFlow, and the example below highlights the results. In the ETH–cbBTC 0.05% pool on Base, after 189 hours of testing, FairFlow consistently delivered a higher APR than the standard pool, proving its strength over time.

Furthermore, after official launch, Equilibrium Gain (EG) has been shown to be a key contributor to LPs’ APR. For example, in the ETH/USDT pool over 7 days, EG delivered returns 3× higher than standard fees.

Unlike short-term incentives, EG is more sustainable - a true form of real yield.

Note: This result may fluctuate based on market volatility, the result above is captured at the 7-day period from August 10 to 16, 2025

Besides Equilibrium Gain, KyberSwap launched 500,000 KNC in Liquidity Mining Rewards as extra incentive for LPs

From 27 August to 19 November, LPs on FairFlow can earn more than just fees and Equilibrium Gain - they’ll also receive Liquidity Mining rewards in extra tokens.

Rewards are announced and distributed across multiple weekly cycles.

FairFlow is now live on Base and Ethereum with multiple pools, offering juicy APRs - even stablecoins can earn over double-digit returns.