Mitosis- The Homosapien of Liquidity Management

Hi there, I could easily tell you that Mitosis solves a liquidity problem we face daily in the crypto space. But you may never really get it.

So I have decided to take you down memory lane to where it all started, a time when interoperability seemed like a myth, strange right🤔?

Before I dive right in, ever heard of the term evolution? Come on, I am sure you have, the human race on its own has evolved over decades, there was a time when we had lots of mechanical equipment, we had to send letters through post offices, etc. Look at Us now, we balling 😄

Back to the crypto (web3 as some of you may know it) space, when it all started, there was no AMM, CLMM, Bridges, etc. But we have evolved from having to pay as much as $50 for transactions to pay as low as 1 cent for transactions, crazy right? Your mind is about to be blown

The big question that may be on your mind is, Why is Liquidity a major issue? Not to worry, I got you covered

Liquidity makes it possible for every crypto user to be able to interact with the crypto space easily, be it trading tokens or NFTs, etc. Without liquidity, you will come across terms like high slippage and price impact, and if they are on the high side, run🏃‍♂️.

Just as how we have evolved in gas fee charges or from having to use post offices, access to liquidity in the crypto space has also evolved. Stay with Me.

The fun part

Back in 2016, Dexes functioned based on the concept of trade by barter, you are probably wondering how, this is how- tokens were only traded using order books, ouch right? This method of trading tokens had lots of shortcomings, imagine you wanted to sell a token and there was no order at the market price, pretty frustrating🥲, you will then have to sell your token at a discounted price, especially if there was an emergency.

In 2018, thanks to Uniswap, AMM (Automated market maker) was introduced to the crypto space. Users provided liquidity in a 2-sided pool. Fun fact, some Dexes still use this method of liquidity provision. But this also had short-comings, inactive liquidity, IL (Impermanent Loss), etc

2021, we had the introduction of DEX aggregators, where token swap routes were checked across different dexes for the best possible price

2022, gave the space optimized cross-chain bridges, CLMM pools (An upgrade to AMM)- Unlike the AMM where liquidity was provided between the range of 0 and ♾️, CLMM has an optimized approach to liquidity making it possible for liquidity to be provided between a certain range, making liquidity provision much more effective.

Also, we had the introduction of Vote Escrowed Tokens (veTokens), all in a bid to reward users while still boosting the liquidity condition of a certain dapp, POL( Protocol Owned Liquidity) first introduced by OlympusDAO

Now, we have so many crypto techs and products that aim to give solutions to liquidity issues.

Challenges amidst the fun

To mention but a few,

To attract liquidity, projects came up with liquidity mining programs, but these rewards were only restricted to that particular project, which implied if a user provided liquidity on Exchange A and Blockchain B, His or Her Liquidity was restricted to Exc A and Block B, which isn't an ideal condition for a User's Fund.

Protocols likely attracted mercenary capitals that are interested in mining rewards, or quick high APY gains.

Users are insecure about their funds on a protocol, such as hacks or teams vanishing with funds.

Inactive liquidity is a common phenomenon in the space. Users end up having a great deal of inactive liquidity just sitting around not generating rewards, etc.

Mitosis, the savior

In a bid to solve the above problems, Mitosis came up with a plan, EOL and Matrix.

Instead of supplying your tokens into a pool that puts a chain restriction on your assets, all you have to do is deposit the tokens into a Mitosis Vault, and in return, you get a vanilla asset(a token that represents your deposited asset) on Mitosis Chain.

With this Vanilla Asset, you can take part in EOL or Matrix Vault, with both being a yield-bearing opportunity.

EOL Vault allows a user to vote on how His or Her liquidity should be utilized for optimized defi incentives, while the Matrix Vaults allows protocols to have access to the liquidity in it while incentivizing maAsset holders

The best part is, these miAsset and maAsset still function as liquid assets on the Mitosis chain

The possibilities are just endless

Conclusion

The opportunities being offered by Mitosis, are second to none, and there has never been one like this.

Just as we talked about the evolution of humanity, the concept of liquidity is evolving, and there will be no proper liquidity management without Mitosis

Food for thought

Would you rather leave your liquidity to be dormant, or supply it to a mitosis vault?

For more info on Mitosis, check: https://mitosis.org/