Unified Liquidity: Simplified
In the world of web3, the term Unified Liquidity gets tossed around frequently — but what does it really mean? Ask 100 DeFi enthusiasts, and you’ll likely hear 101 different interpretations. At Euclid Protocol, we believe Unified Liquidity should be simple:
“Any asset, accessible seamlessly from any network across the ecosystem.”
Let’s break down some of the current liquidity mechanisms and explain why Euclid’s Unified Liquidity Layer is the game-changer DeFi needs.
Fragmented Liquidity: The Status Quo
Here’s a scenario we’ve all faced:
- Peter has ETH on Ethereum but wants OP on Optimism.
- To get it, he needs to bridge his ETH, pay gas fees, switch wallets, and complete multiple transactions — or pay a relayer to do it.
This setup is fragmented liquidity: assets on one chain can’t inherently access assets on another.
Abstracted Liquidity: A Better UX, but Not Unified
Now consider Polly, who uses a cross-chain aggregator:
- Polly signs a single transaction, and the aggregator handles the bridging, swapping, and fees in the background.
This approach abstracts complexity for the user, but it’s not true Unified Liquidity. The assets themselves still don’t communicate or share liquidity across chains — they just appear unified.
Cross-Chain Intents: Good, but Limited
Cross-chain intents allow solvers (think on-chain market makers) to execute trades for users on different chains. While this is a step forward, it’s far from perfect:
1. Centralization Risks: Market makers are centralized entities, introducing single points of failure and reliance on external liquidity providers.
2. Asset Limitations: Market makers only support select assets and may require incentives, restricting protocols’ access to liquidity.
3. Scaling Challenges: Intents optimize transaction times but struggle to serve as a foundation for scalable, cross-chain DeFi infrastructure.
While intents are a useful tool, they’re not the solution for true cross-chain liquidity.
Unified Liquidity: Keeping It Native and Simple
With Unified Liquidity, assets stay secure on their native chains while still interacting with external liquidity pools across networks.
Example: Paul swaps from ETH (Ethereum) to POL (Polygon) without moving his ETH off Ethereum.
This is made possible by a robust messaging and settlement layer — like Euclid Protocol. Transactions that once required multiple wallets, bridges, and fees now happen in a single, seamless process.
Example: Peggy swaps ETH → SOL → POL → USDC → USDT → GOLDT (tokenized gold) in one transaction.
With fragmented liquidity, this would require six bridges, seven swaps, and exorbitant fees — rendering it impractical.
How Unified Liquidity Works
In Unified Liquidity, every asset deposited into a pool becomes part of a vast, interconnected network:
- Liquidity Sharing: Any asset can communicate with and access liquidity from pools on other chains.
- Fee Optimization: Liquidity depth enables fee generation and market efficiency, even without direct transactions or bridging.
- Infinite Routes: Assets form a network of “roads,” creating endless possibilities for swaps and liquidity access.
Join the Unified Liquidity Movement
Fragmented liquidity currently traps over $30 billion across chains. Euclid is here to unify it. By embracing Unified Liquidity, liquidity providers, protocols, and users alike can collaborate to create a more efficient, scalable, and inclusive DeFi ecosystem — making DeFi great again!
