# Inside Look - Unveiling Mitosis' Strategy

**Published by:** [t0xci](https://paragraph.com/@t0xci/)
**Published on:** 2024-08-04
**URL:** https://paragraph.com/@t0xci/inside-look-unveiling-mitosis-strategy

## Content

Inside Look - Unveiling Mitosis' StrategyWhat’s Mitosis doing? Why is Mitosis collecting liquidity? What’s happening in the forum? What comes next? In this article, we reveal Mitosis' strategies and delve into their decision-making process.Mitosis' Problem Statement: Unlevel Playing Field for Retail LPsMitosis began by identifying the struggles retail liquidity providers (LPs) face:Unlike large players, retail LPs lack significant bargaining power and cannot participate in private negotiations with better terms.Reward terms for public yield options are often unclear compared to private deals.Private terms do not allow for the establishment of benchmark yields, increasing the risk of missed opportunities.Fees such as gas and bridging costs have a significant impact on retail LPs, complicating portfolio diversification.Mitosis' ApproachTo address these disadvantages, Mitosis used an approach that simulates the process of attracting large-scale liquidity and integrated it on-chain. Mitosis made two key changes to this scenario:Opened previously private negotiations to all LPs.Made previously private terms transparent and publicly accessible.First Step: Securing Bulk LiquidityThe first step is to gain strong bargaining power by collecting bulk liquidity. To achieve this, Mitosis deployed vaults on each blockchain and accepted deposits from all types of LPs. Thanks to community support, Mitosis has gathered approximately $100 million. This liquidity appeals to protocols preparing for new launches, chain expansion, and use case diversification. Several protocols are already lined up to negotiate favorable terms for LPs. By shifting LPs' access point from individual negotiations to the liquidity pool, Mitosis achieves its first goal: granting all LPs access to bargaining power.Second Step: Displaying Clear Reward Proposals for ComparisonThe second step is to have candidate protocols post clear reward terms on an open platform. To facilitate this, Mitosis runs an open forum where interested protocols post their introductory and reward proposals. The forum makes previously private reward terms fully transparent. Additionally, Mitosis provides a standardized format to ensure straightforward comparisons between reward terms. This step allows Mitosis to fulfill its second goal: providing clear reward terms upfront.Third Step: Ecosystem-Driven Decision-MakingThe third step involves having the ecosystem jointly determine the allocation of pooled liquidity. For this purpose, Mitosis implements the Ecosystem-Owned Liquidity (EOL) Allocation Governance. In this governance process, Mitosis LPs, protocol builders, network or asset builders, and other ecosystem participants gather to share opinions on liquidity allocation. After discussions, LPs vote to determine whether to opt in and how much to allocate to each protocol. This collective decision-making process is why the pooled liquidity is termed "Ecosystem-Owned."Fourth Step: Reward DistributionThe fourth step is to distribute rewards generated on EOL to Mitosis LPs, regardless of the chain they deposited to. The collective liquidity moves together, mitigating the gas and protocol costs each Mitosis LP has to bear. Because the EOL is spread across multiple chains, Mitosis LPs benefit from exposure to multi-network reward opportunities without having to bridge their assets. This achieves Mitosis’ fourth goal: diversifying portfolios across multiple networks with minimized fee impact.Mitosis: Plans for All Market ParticipantsThrough a series of carefully planned actions, Mitosis is dismantling the barriers that have disadvantaged retail LPs. However, Mitosis doesn't just benefit retail LPs; its inclusive, transparent liquidity marketplace will also transform the experiences of larger players and protocols. Stay tuned as Mitosis unveils its master plans crafted for all market participants.

## Publication Information

- [t0xci](https://paragraph.com/@t0xci/): Publication homepage
- [All Posts](https://paragraph.com/@t0xci/): More posts from this publication
- [RSS Feed](https://api.paragraph.com/blogs/rss/@t0xci): Subscribe to updates
- [Twitter](https://twitter.com/0xt0xci): Follow on Twitter