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Chapter 8 - Stakeholders Value Propositions

Liquidity Providers: (1) Data Driven Decision-Making​; and (2) Cross-Network Yield Optimization​

Data Driven Decisions for LPs and Protocols

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(1) Data Driven Decisions​

  • Access to clear, data-driven insights helps LPs make more informed choices about where to allocate their assets. EOL Allocation Governance enables the LPs to make informed decisions with clear reward schemes upfront. The LPs in the ecosystem can use collective intelligence in the process.

  • In the current structure, retail LPs seek out publicly announced opportunities individually to allocate their assets. In the case of EOL, EOL Allocation Governance resembles the dynamics between institutional liquidity and protocols in that protocols approach EOL first with their proposals. The protocols must suggest a clear, competitive reward scheme to gain support from the community. This new dynamic implies several benefits for LPs:

    • Upfront, Clear Reward Scheme: Proposals provide transparent, explicit profit outcomes, simplifying comparisons between reward schemes.
    • Reduced Research Burden: Protocols approach LPs first with their proposals, reducing the burden on individual LPs to keep up with all the news and updates to discover yield opportunities.
    • Leveraging Collective Intelligence: LPs can leverage the community’s diverse knowledge base on different networks and applications.
    • Avoiding Suboptimal Opportunities: It only takes one knowledgeable LP to submit proof (e.g., explanation, statistics, link) to filter out a suboptimal opportunity.

All these factors increase the chances for LPs to make accurate decisions, thereby reducing opportunity costs.

(2) Cross-Network Yield Optimization​

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Mitosis EOL offers unique advantages in multi-network yield optimization:

  • Universal Reward Distribution: Rewards accumulated in any Mitosis Vault are distributed across all Mitosis LPs, regardless of their specific vault deposits. This allows LPs to gain exposure to rewards from all Mitosis-supported networks through a single deposit.
  • Eliminated Bridging Risks: By pooling liquidity across networks, EOL removes the need for individual LPs to bridge assets, thereby eliminating associated risks and costs.
  • Collective Expertise: The shared ownership model of EOL allows LPs to benefit from the diverse knowledge base of the entire LP community. Through Asset Allocation Governance, LPs can leverage each other's expertise across various networks and protocols.
  • Simplified Multi-Network Exposure: LPs can access opportunities across multiple networks without needing in-depth knowledge of each one, lowering the barrier to entry for cross-network yield farming.

This approach maximizes yield potential while minimizing individual risk and complexity, making sophisticated multi-network strategies accessible to a broader range of participants.

For Protocols: (1) Preemptive Feedback; and (2) Streamlined Multi-Chain Expansion

(1) Preemptive Feedback​

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Protocols gain insights from Mitosis’s diverse user base in the following ways:

  • Reward Propositions: Protocols can refine their reward schemes based on feedback, preventing post-proposal disputes regarding reward terms.
  • Early Concept Validation: Protocols gain a platform to test ideas and gather user feedback, allowing it to refine and develop ideas to better align with market values and user needs.

(2) Streamlined Multi-Chain Expansion​

EOL facilitates easier multi-network expansion for protocols:

  • Established Relationship: Protocols that have successfully used EOL on one network can leverage this familiarity when expanding to others.
  • Reduced Due Diligence: The Mitosis ecosystem's prior research and discussions about a protocol streamline future liquidity provision decisions.
  • Efficient Launches: Protocols can more quickly bootstrap liquidity on new networks, benefiting from the trust and understanding already built with Mitosis LPs.

Example: Protocol A initially uses EOL to launch on Ethereum. When expanding to Arbitrum, it benefits from:

  • Existing familiarity with Mitosis LPs
  • Previous ecosystem research on its mechanism and team
  • Faster decision-making by LPs due to established trust

This process accelerates Protocol A's successful launch on Arbitrum, demonstrating EOL's value in multi-network expansion strategies. As we explore the Mitosis L1 blockchain in the next section, we'll see how this multi-network approach extends even further, creating a unique ecosystem where miAssets play a central role in fostering innovation and stability across the DeFi landscape.