A few years ago, an article titled "Payment for Order Flow on Solana" sparked quite a discussion on social media, touching on some real issues in the trading fee market.

Payment for order flow (PFOF) has actually been used in traditional finance for a long time. Robinhood and similar companies rely on this model—under the banner of "zero commission trading," they have aggressively taken market share from established brokerages. Giants like Charles Schwab and E-Trade later had to follow suit and lower commissions, which changed the business model of the entire US retail brokerage industry.

The numbers are quite clear. In 2021, Robinhood earned nearly $1 billion just from PFOF, accounting for about half of their annual revenue. By 2025, this business still generates several hundred million dollars per quarter. The profits in this trade are quite substantial.

Why are market makers so eager about retail orders? Simply put, retail orders are seen as "clean." These orders usually come from immediate emotional decisions or genuine needs, unlike institutional large orders that hide precise market predictions. Market makers take on these orders, earning a steady profit from the bid-ask spread, and don't have to worry much about being exploited by informed traders.

Because of this supply and demand relationship, exchanges and brokers bundle user orders into commodities and sell them in bulk to market makers like Citadel. It seems like a win-win situation, but in reality, retail investors often unknowingly suffer losses in this transaction.