What is Ecosystem-Owned Liquidity (EOL)?
Ecosystem-Owned Liquidity (EOL) is an innovative liquidity management model, developed by the Mitosis protocol, a Layer 1 blockchain that aims to unify fragmented DeFi liquidity across multiple chains. With EOL, ownership and control of liquidity is shifted to the ecosystem itself, via DAO-controlled reserves, unlike traditional liquidity pools that tend to concentrate on attracting capital (which is often referred to as “mercenary capital” driven) with short-term incentives which results in volatility and inefficiency. EOL creates a community-driven system in which liquidity is sustainably pooled, tokenized and programmatically deployed to optimize yields while minimizing capital lockup and fragmentation. In a nutshell, EOL Changes the paradigm of passive liquidity provisioning into an advanced, programmable asset class, providing deep integrations to foster alignment across the liquidity providers (LPs), protocols and the ecosystem.
EOL fundamentally improves the DeFi experience across multiple chains by allowing assets to be bridged and deployed across chains without manual intervention for the user and empowering the community to govern the deployments on a permissionless basis. This is part of Mitosis's vision of “Ecosystem-Owned Liquidity” which aims to build enduring value by reducing reliance on external incentives, allowing the protocol to control and own a large part of its liquidity.
