Core Value Flywheel for Mitosis
Intro
Efficient capital allocation has become more complex than ever due to the surge of networks and protocols. Liquidity providers (LPs) suffer from an overload of choices and a scarcity of clear information. Protocols struggle to bootstrap liquidity amid a fragmented user base across networks. Mitosis aims to transform the dynamics of liquidity distribution. Here, we present Mitosis’s value proposition.
Mitosis Value Proposition
- Mitosis enables price discovery of liquidity through a public liquidity marketplace.
- Mitosis provides blockchain users with access to benchmark multi-chain yield via miAssets.
- Mitosis serves as a value exchange layer for seamless user and builder experience in the multi-chain era.
The team designed the Mitosis Ecosystem to operate on flywheels that amplify the above values. We will walk you through each point and its corresponding flywheels.
The Three Flywheels of Mitosis
Mitosis takes on different definitions in each of its three flywheels based on the focus of each:
- A public liquidity marketplace
- A layer 1 with benchmark multi-chain yield
- A value exchange layer for networks
The Public Liquidity Marketplace
Protocols often rely on private LPs to bootstrap initial liquidity. With its large scale and stability, private liquidity plays a crucial role in the blockchain landscape, buying time for protocols until they start attracting organic liquidity. While essential in the current status quo, excessive reliance on private liquidity may hinder price discovery for liquidity.
Private liquidity can limit price discovery because the terms remain undisclosed and exclusive to the involved LPs. Without transparent pricing information, market participants cannot compare their options. LPs with timely needs cannot offer lower prices, and protocols in greater urgency cannot offer better rewards. As a result, supply-demand matching remains inefficient.
Mitosis creates a public liquidity marketplace to address these issues. By moving private liquidity deals into the public arena, terms become transparent and accessible to all types of LPs. This shift enables effective supply-demand matching and accurate price discovery. Transparent pricing facilitates accurate cost planning for consumers (protocols) and revenue prediction for suppliers (LPs), thereby allowing the market to scale to the next level.
https://docs.mitosis.org/docs/category/mitosis-redefines-the-liquidity-market-dynamics-1
The L1 with Benchmark Multi-Chain Yield
Benchmark multi-chain yield accumulates on miAssets through Mitosis Vaults on each supported network. Users onboard by depositing assets into the Mitosis Vault of their choice and receiving corresponding assets on the Mitosis Chain. If users opt in, their vault liquidity is allocated to protocols across networks based on market decisions. The resulting yield reflects the pricing in the Mitosis liquidity marketplace, ensuring it is the benchmark for multi-chain yield.
The Mitosis L1 Chain offers blockchain users a convenient way to access benchmark multi-chain yield. As the shift towards a modular framework continues and more networks emerge, the complexity and demand for capturing multi-network opportunities will increase. This demand boosts liquidity for the Mitosis L1 Chain, driven by miAssets’ multi-chain yield. Increased liquidity attracts builders, who expand the use cases for the liquidity. This expansion of use cases, in turn, attracts even more liquidity, completing the flywheel.
https://docs.mitosis.org/docs/learn/mitosis-solution/intro
The Value Exchange Layer for Networks
Mitosis Vaults on various networks and the Mitosis Chain also serve as a value exchange layer across networks. For instance, users can deposit their weETH on Ethereum, receive corresponding weETH on Mitosis, convert it into USDe in a DEX on Mitosis, and redeem the USDe from the Mitosis Vault on Arbitrum.
The liquidity marketplace and the value exchange layer mutually enhance each other’s growth. As value freely flows from one network to another and activity across several networks becomes commonplace for users, the transition to a multi-chain environment is accelerated. This diversification in network options intensifies liquidity competition and complicates liquidity distribution choices, increasing the need for a liquidity marketplace. This heightened demand leads to a diverse and substantial liquidity influx into the Mitosis Ecosystem, enabling the value exchange layer to handle more varied and larger-scale use cases.
Stay Tuned for the Series!
Through the Mitosis Flywheels, we briefly explained how Mitosis contributes to the blockchain landscape. This series will guide you through how the Mitosis Ecosystem is structured around its liquidity marketplace. We will explore how Mitosis optimizes the distribution of asset resources across networks, accelerating innovations in the multi-network era. The content from this series will also be featured in quizzes and events, so stay tuned!
