Liquidity is the lifeblood of DeFi. From AMM, lending, stablecoins to derivatives, all require a plentiful and efficient flow of capital to operate. However, over many years of development, DeFi has struggled with the problem of fragmented liquidity, which is difficult to optimize and lacks fairness in accessing yields.
This is not just a new DeFi protocol, but also an infrastructure layer that helps program liquidity, opening up the potential to build a more efficient, fair, and sustainable decentralized financial system.
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Issue: Liquidity is locked and fragmented
In traditional DeFi, liquidity is often tightly linked to a specific protocol:
• Users provide liquidity to the AMM pool (e.g., ETH/USDC).
• Or deposit assets into a lending protocol to earn interest.
• Or staking tokens to receive rewards.
These forms, while simple, lead to limitations:
• Liquidity is ‘frozen’ – assets are locked in a pool, difficult to reuse.
• Lack of programmability – LP tokens or yield tokens have not been fully exploited.
• Inequality in yield – large investors often access better yields thanks to their private tools.
Consequence: capital flow in DeFi is fragmented, hard to circulate, reducing the overall efficiency of the ecosystem
@Mitosis Official , #Mitosis and $MITO
