Flow Defi

---
name: flow-defi
description: |
  Architecture guide for building DeFi protocols on the Flow blockchain. Covers Flow's DeFi-specific advantages (MEV-free EVM, cross-VM atomic transactions, on-chain automation), core DeFi primitives (lending health factors, interest rate kink models, AMM type selection), liquidity bootstrapping strategy (veFLOW, Merkl, CL ranges, bootstrapping benchmarks), and the current Flow DeFi ecosystem map (existing protocols, missing primitives, opportunity analysis).
  TRIGGER when: designing a lending protocol on Flow, choosing AMM type for a DEX, liquidity bootstrapping strategy, veFLOW mechanics, "how does Flow DeFi work", "AMM types on Flow", "liquidity bootstrapping", "Flow DeFi ecosystem", "cross-VM composability for DeFi", "health factors", "interest rate curves", "collateral design", "DEX TVL", "Merkl integration", "missing DeFi primitives on Flow", "perp DEX on Flow", "launchpad on Flow", "COA pattern", "MEV-free EVM".
  DO NOT TRIGGER when: designing token economics (use flow-tokenomics), asking about Cadence syntax (use cadence-lang).
---

# Flow DeFi Architecture

Design and build DeFi protocols on Flow — covering architectural advantages, core primitives, liquidity strategy, and the ecosystem landscape.

## Navigation Map

| Task | Reference |
|------|-----------|
| Flow DeFi foundations: COAs, MEV-free EVM, cross-VM atomicity, on-chain automation | [protocol-architecture.md](references/protocol-architecture.md) |
| Core primitives: lending models, AMM type selection guide, risk framework | [defi-primitives.md](references/defi-primitives.md) |
| Liquidity bootstrapping: veFLOW, Merkl, CL ranges, failure modes, benchmarks | [liquidity-strategy.md](references/liquidity-strategy.md) |
| Ecosystem map: current state, missing primitives, opportunity analysis | [ecosystem-map.md](references/ecosystem-map.md) |

## Key Principles

1. **MEV-free EVM** — Flow's architecture prevents sandwich attacks on the EVM side; LP positions retain more yield
2. **Cross-VM atomicity** — A single Cadence transaction can call EVM contracts atomically (no bridges for Cadence↔EVM)
3. **COA pattern** — Cadence Owned Accounts bridge Cadence logic and EVM contracts within the same address space
4. **On-chain automation** — FlowTransactionScheduler (FLIP 330) enables recurring transactions without keeper bots
5. **Lock-up or lose** — Liquidity programs without lock-ups lose 60–80% TVL within 30 days

## Companion Skills

- **`flow-tokenomics`** — Use alongside when designing the token economics for your DeFi protocol (veFLOW-style governance token, fee distribution, etc.).
- **`cadence-lang`** — Consult for Cadence language rules when implementing protocol contracts.
- **`cadence-audit`** — Use to audit protocol contracts before deployment.