In the world of Decentralized Finance (DeFi), Liquidity plays a crucial role. It is like the blood of the entire system; without sufficient liquidity, Decentralized Exchanges (DEX) will be unable to complete transactions, lending platforms will struggle to distribute loans, and stablecoins will lack the necessary support.

However, as the blockchain ecosystem continues to expand, a serious problem gradually emerges: the fragmentation of liquidity. Funds are scattered across various public chains, with some Ether (ETH) here, and some USD Coin (USDC) there, each circulating in their own small pools, resulting in a significant reduction in overall efficiency.

The Mitosis project has proposed a solution to the persistent issue of "fragmented liquidity." They have innovatively introduced a model known as EOL (Ecological Own Liquidity), aiming to completely restructure the entire liquidity layer. The significance of this initiative is self-evident.

Let's imagine a similar situation in the real world: if each bank's US dollars could only be used within that bank, transferring to other banks would require a long detour and incur high fees. This does sound absurd, but it precisely reflects the current state of the multi-chain Decentralized Finance ecosystem.

Ethereum operates smoothly within the Ethereum ecosystem, but transferring to the BNB Chain requires a cross-chain bridge; USDC has abundant liquidity on the Polygon network, but may be relatively scarce on Arbitrum. Different DEXs and lending protocols have their own governance, dividing user bases and liquidity pools. This situation leads to a severe fragmentation of liquidity, significantly reducing capital efficiency.

In the past few years, the industry has generally adopted the method of "liquidity mining" to address this challenge. However, while this approach can attract funds in the short term, it also brings a series of new problems. Mitosis's EOL model may provide a new solution to this long-standing issue and inject new momentum into the healthy development of the Decentralized Finance ecosystem.