Mitosis is a gateway to programmable liquidity that revolutionizes on-chain liquidity procurement and trading. Mitosis is a cutting-edge Layer 1 (L1) blockchain technology that uses ecosystem-owned liquidity (EOL) architecture to unify liquidity provision across numerous blockchains. Mitosis seeks to provide a novel liquidity model to freshly constructed modular blockchains and decentralized apps (dApps) to attract additional TVL through community-owned liquidity. Users can earn MITO Points by participating in Mitosis Expeditions and depositing them into vaults.

What is the Mitosis Ecosystem?

Mitosis is an ecosystem-owned liquidity (EOL) layer 1 blockchain that enables freshly constructed modular blockchains to grab TVL and attract users via the Mitosis governance process. DeFi protocols rely primarily on private transactions with major liquidity providers, resulting in opaque terms and volatile liquidity. Mitosis alters this dynamic via two crucial components. Ecosystem-owned liquidity (EOL) enables liquidity providers to deposit assets into Mitosis Vaults across several chains and Mitosis L1, where liquidity choices are made using miAssets: yield-bearing tokens representing shares of the protocol’s overall liquidity.

EOL is currently in development and will provide various interesting features to all DeFi users. Most importantly, EOL seeks to streamline the decision-making process for retail liquidity providers. Retail users may feel overwhelmed by the options when determining where to allocate their liquidity. EOL tackles this issue by unifying yields across distinct chains, allowing users to benefit from cross-chain yields without the inconvenience of comparing yields from multiple networks.

Background of Mitosis

Mitosis Ecosystem was established in 2023 by Jake Kim, headquartered in South Korea. Jake Kim is a seasoned cryptocurrency builder and serial entrepreneur. We are a close-knit team that has been working together for two years. We have expertise and experience in crypto/blockchain, front-end and back-end and contract engineering, mathematics, statistics, and financial services.

As of April 2024, the Mitosis team had raised over $7 million in seed capital from top-tier VC companies and angel investors in Singapore, Hong Kong, and the United States. Notable investors include Foresight Ventures, Amber Group, No Lights Holdings, and GSR. The Mitosis LRT Program’s marketing campaign recruited over 200,000 beta test participants in ten days. The Mitosis Expedition program also accumulated over $100 million in total value locked. Mitosis has built tight connections with well-known dApps such as Ether.fi, Symbiotic, and Hyperlane.

Features of Mitosis Ecosystem

Security

Today’s cross-chain security fails to scale with the locked LP assets intended to safeguard. The cross-chain protocols lack accountability, and their security mechanisms impede protocol growth. Mitosis uses a crypto-economic security mechanism that strengthens as the protocol’s TVL increases. Mitosis intends to use restaked ETH security to validate cross-chain messages and the Mitosis chain’s PoS security, administered by a trusted set of validators. Additionally, cross-chain LPs can give their derivative tokens to secure Hyperlane-powered cross-chain messaging and get Mitosis governance tokens in return. The Mitosis Vault smart contract has been thoroughly audited by two businesses specializing in smart contract auditing: Secure 3 and Omniscia.

Capital Efficiency

The Mitosis L1 chain, with its unique miAsset mechanism, converts static deposits into productive assets. Unlike traditional cross-chain bridges, which essentially lock assets, Mitosis allows deposited assets to produce yield via EOL while also serving as building blocks for DeFi applications on the L1.

This dual function is activated when users convert their Vanilla Assets to miAssets. As yield-bearing tokens, miAssets automatically collect returns from EOL’s multi-chain allocations. At the same time, these miAssets can be used in various DeFi applications running on Mitosis L1, adding an extra layer of capital efficiency.

Interoperability

Unlike the blockchain industry’s continuing modular and permissionless shift, today’s cross-chain interoperability is permissioned and compartmentalized. Mitosis’ approach to cross-chain liquidity is based on permissionless interoperability, which is also the underlying concept of its key partner Hyperlane.

Users can quickly deploy the Mitosis smart contract and link it to other modular chains using Mitosis’ fast-track governance procedure. Mitosis secures sovereignty by removing liquidity from the subordinate structures of AMB solutions, bringing cross-chain interoperability up to pace with the ongoing modular transformation.

Mitosis Ecosystem

Ecosystem Owned Liquidity (EOL)

Mitosis’ flagship product is EOL, which pools liquidity from individual liquidity providers inside a Decentralized Autonomous Organization (DAO) governance structure. Retail liquidity providers can now supply institutional-level liquidity within decentralized finance (DeFi) in the same way that large financial institutions can. This technique strengthens individual liquidity providers’ bargaining leverage, allowing them to take advantage of the economies of scale associated with larger liquidity pools.

Users will determine the allocation and terms of the liquidity provision via public governance votes and forum debates.

Mitosis vaults provide access to ecosystem-owned liquidity pools (EOL LP). To use the Mitosis vault, a user deposits weETH into the weETH Mitosis vault and receives miweETH in exchange. This miweETH grants the user voting privileges, allowing them to influence how the pooled liquidity is managed in the vault.

Mitosis vaults are built after extensive forum debates. To be authorized as a Mitosis vault, protocols must first go through a forum discussion, followed by an initiation vote. If the request passes, the vault will be formally listed on the Mitosis platform. The EOL’s earnings accumulate in the Mitosis Vaults. Mitosis then distributes incentives to all Mitosis LPs, regardless of the network used for their deposits. This strategy assures that all LPs receive multi-chain yield exposure.

Mitosis L1

The Mitosis L1 chain is a purpose-built blockchain that drives the protocol’s liquidity collective. Mitosis L1, which Ethereum secures via EigenLayer, is more than simply a transaction layer; it is also the infrastructure that allows DeFi applications to benefit from EOL’s liquidity and governance mechanisms. It is the protocol’s liquidity collective’s coordination hub, linking and standardizing assets across many blockchain networks via strategically placed Mitosis Vaults.

When users deposit assets into Mitosis Vaults on any supported chain, they first obtain Vanilla Assets on the L1, representing their deposits. These vanilla assets can be turned into miAssets via EOL opt-in, converting deposits into yield-bearing tokens that capture value from cross-chain opportunities, increasing capital efficiency. Users can then opt into EOL by changing their assets into miAssets. These yield-bearing tokens benefit from EOL’s multi-chain allocations. For example, a user who deposits ETH and opts into EOL receives miETH, giving them governance over ETH allocation and the ability to produce yields.

The Mitosis L1’s design enables sophisticated DeFi applications to be built on assets. These applications have the potential to produce new financial instruments that allow users to trade, offer liquidity, or speculate on yields generated across numerous chains at the same time. This composability converts passive liquidity into dynamic, yield-generating assets that reflect the overall performance of EOL methods.

Mitosis Vaults

Mitosis Vaults act as access points to EOL pools. Users can deposit assets into these vaults and obtain derivative tokens in exchange (e.g., miweETH for deposited weETH). These derivative tokens give users voting rights, allowing them to influence how pooled liquidity is managed within the vault. EOL earnings accumulate in the Mitosis Vaults and are dispersed to all LPs, regardless of the network used for their deposits.

miAsset

MiAsset is a key Mitosis component that allows the concept of ecosystem-owned liquidity (EOL). LPs receive the yields embedded in the underlying assets simply by owning miAssets. Mitosis Vault techniques manage LP assets by assigning them to different yield sources across multiple DeFi chains. Instead of actively deploying capital and risking liquidity fragmentation, LPs can acquire multi-chain DeFi exposure by holding miAssets. EOL LPs receive miAssets in exchange for their deposit in the EOL Vault. miAssets provides EOL allocation governance and yield distribution. miAssets have three primary functions:

• Voting power in EOL Allocation Governance is proportional to the number of miAssets held.
• Omni-sourced yield accumulates on miAssets, which is the foundation for its distribution.
• Liquid Representative for DApp Utilization: EOL LPs can use miAssets to participate in various DeFi activities on Mitosis.

miAssets, with their default omni-sourced yield, play an essential role in the Mitosis ecosystem. A forthcoming essay will focus entirely on how miAssets fuel Mitosis’ flywheel.

How Does Mitosis Ecosystem Work?

The EOL Allocation

The Mitosis EOL Allocation is a systematic procedure that allows for collective decision-making on liquidity allocation while emphasizing transparency and market efficiency. EOL adds transparent price discovery processes to existing practices to make the DeFi ecosystem more inclusive and efficient. The procedure relies on two main voting mechanisms:

Initiation Voting for New Protocol Integration

Protocols seeking EOL integration must first submit proposals to the Mitosis Forum, which specify their terms, incentive schemes, and intended use of liquidity. The community reviews these suggestions, and missed holders decide whether to incorporate the protocol in EOL’s allocation portfolio. This approach assures that only protocols with competitive terms and demonstrated long-term value can access the collective’s money.

Gauge Voting for Ongoing Liquidity Allocation

Once accepted, protocols are eligible for liquidity allocation via weekly gauge votes. miAsset holders vote on how their unique asset’s liquidity should be divided across approved protocols. For example, miETH holders vote on ETH allocation, and miUSDC holders vote on USDC allocation. Voting power is proportionate to miAsset holdings, and users can delegate voting rights to applications built on Mitosis L1, allowing for efficient governance involvement at scale.

Voting Mechanics

Mitosis uses a Time-Weighted Average Balance (TWAB) Voting Power mechanism to promote equitable representation and efficient decision-making across its multi-chain ecosystem. The approach enables miAsset holders to vote on proposals for any chain, regardless of where they are stored, resulting in effective liquidity allocation across the Mitosis ecosystem. The responsive yet secure voting procedure typically resolves in 24-27 days, providing for comprehensive scrutiny of each proposal while also being able to respond to new possibilities and deployments quickly.

Governance

Mitosis has three primary governance platforms: Expedition, Synthesis, and Forum.

Mitosis Expedition

Mitosis Expedition aims to encourage and reward community participation in governance activities. This gamified system invites users to actively participate in different parts of the Mitosis protocol, such as supplying liquidity and voting on governance proposals.

Expedition users can gain experience points (XP) and level up their profile, which unlocks additional features and rewards as they continue. The software delivers real-time feedback on user contributions and features a leaderboard to encourage healthy competition within the community. Mitosis Expedition strives to boost overall engagement and decision-making quality, resulting in a more vibrant and engaged environment.

Mitosis Synthesis

Mitosis Synthesis Application is a user-friendly platform for governance participation and voting, allowing all community members to participate in the governance process effortlessly. Users can see real-time results, their voting power based on miAsset holdings, and a customized dashboard that displays their active votes and history. Users must connect their wallets and vote using a simple process to participate. They have the opportunity to delegate their voting rights.

Mitosis Forum

The Mitosis Forum is an open venue for proposal discussions and community debates, where all stakeholders can offer ideas, provide feedback, and help refine proposals before they are voted on. It includes categorized discussions for various proposal types and phases and standard templates for each stage. This guarantees that all relevant information is presented while facilitating structured community interaction.

Mitosis App

The Mitosis app focuses on ecosystem-owned liquidity (EOL), which uses decentralized finance (DeFi) tools to manage liquidity across many protocols or dApps. With the Mitosis Expedition, the app supports more assets besides weETH, including weETHs, uniETH, ezETH, uniBTC, and cmETH. The expedition’s MITO points are determined separately based on the assets involved. These assets have a derivative token representing the particular assets locked in Mitosis. They include weETH (MiweETH), weETHs (MiweETHs), uniETH (miuniETH), ezETH (miezETH), uniBTC (miuniBTC), and cmETH (micmETH). When Mitosis LPs deposit any assets, for instance, weETH, they receive miweETH in a 1:1 ratio. The holders of the derivative token can burn them to obtain the underlying weETH. Users must have the derivative token for any assets they deposit to get points. Users can also earn more MITO Points by collecting Expedition (weETH) badges.

Badges are divided into multiple categories: onboarding badge, early adopters badge designed to reward early Mitosis and each asset’s ecosystem contributor, growth badge, milestones badge that can be claimed when the stipulated total deposit caps are met, and the community badge reserved for claim by users who have specific roles in the Mitosis Discord channel.

MITO Points and Assets

As the ecosystem supports seven assets, each has its expedition, with MITO points computed separately for each type. MITO Points of any assets in the Mitosis ecosystem are not transferable, and users cannot exchange or give/receive points with one another. The expedition participants can earn MITO Points by holding the derivative token for any assets they are participating in and can monitor their MITO Points on the My Dashboard page.

Users can get MITO points based on the daily point scheme in the Mitosis ecosystem. The Daily Total is the number of MITO Points a participant receives for Mitosis assets in 24 hours. Mitosis calculates the daily total using a process known as the Daily Point Scheme. The Daily Point Scheme begins with Default Points and progresses via numerous boosts to reach the ultimate Daily Total number. Mitosis provides exclusive advantages to the select expedition participants who made significant contributions.

All expedition participants are divided into five tiers based on their MITO point totals. Higher tiers offer additional perks, such as increased community redistribution awards and privileges. Tiers are updated hourly. Users can check their tier status on the “My Dashboard” page and compare their progress to the other participants on the “Leaderboard” page.

Expedition participants earn MITO Points by depositing and holding miAssets. Accumulating MITO Points grants access to Mitosis governance token airdrops. Here is how to start earning MITO points.

Step 1: Get Assets

Users must get miAssets (weETH, weETHs, uniETH, ezETH, uniBTC, and cmETH) of their choice. Users who deposited weETH but did not receive miweETH on a 1:1 ratio should know that Mitosis converts eETH to weETH using Ether. If they deposit eETH, Fi will wrap the contract. The miweETH amount created may differ from the deposited eETH amount due to the conversion rate between eETH and weETH at the time of the refund transaction. Suppose users receive a different miweETH amount than they deposited (even if they deposited weETH). In that case, they were the final depositor to reach the individual network’s deposit cap, and Mitosis returns the remaining amount.

Step 2: Join Mitosis Expedition

Users must visit the official website to access Mitosis Expedition via the app (https://app.mitosis.org/). Then users must connect their wallets and accept and sign the prompted message.

Step 2: Deposit or Redeem Assets

Now that users have some assets, the next step is to deposit them in Mitosis. Users must visit the Expedition website and use the Deposit UI. The minimal deposit is 0.001 of the acquired asset in every transaction. Mitosis puts the funds into Ethereum’s Mitosis Vault smart contract when users submit transactions. Numerous networks are available for users to deposit the acquired assets to Mitosis.

Assets supported networks.

• weETH: Ethereum (Chain ID: 1), Arbitrum (Chain ID: 42161), Scroll (Chain ID: 534352), Mode (Chain ID: 34443), Blast (Chain ID: 81457), Linea (Chain ID: 59144), Optimism (Chain ID: 10), and Manta (Chain ID: 169).
• weETHs: Currently supports just Ethereum (Chain ID: 1).
• uniETH: Ethereum (Chain ID: 1), Arbitrum (Chain ID: 42161), Scroll (Chain ID: 534352), and Linea (Chain ID: 59144).
• ezETH: Ethereum (Chain ID: 1), Arbitrum (Chain ID: 42161), Linea (Chain ID: 59144), Mode (Chain ID: 34443), and Blast (Chain ID: 81457).
• uniBTC: Ethereum (Chain ID: 1), Arbitrum (Chain ID: 42161), Optimism (Chain ID: 10), and BNB (Chain ID: 56)
• cmeth: Currently supports just Mantle (Chain ID: 5000)

Step 3: Deposit and Confirm Transaction

Step 4: Receiving MITO Points

Users must check their recently issued derivative token and hold the derivative token to continue receiving MITO Points (weETH). For example, during the expedition (ezETH), participants can either hold the derivative token (miezETH) for MITO Points (ezETH) or redeem it. Holding miezETH on the Ethereum network allows users to earn MITO Points (ezETH). L2 networks have a more considerable boost multiple than Ethereum. In addition, each network will have a unique Epoch deposit threshold and network boost. Users are urged to plan their expedition approach to maximize their Boost multiples and MITO points.

Mitosis Expeditions

To establish its ecosystem and recruit early adopters, Mitosis has started a campaign called “Mitosis Expeditions.” The Mitosis Expedition campaign marks the beginning of LRT’s cross-chain expansion. The expedition will host liquidity for the Mitosis EOL (Ecosystem-Owned Liquidity) initiative while retaining missed liquidity. EOL obtains distinct yield prospects for miAsset holders through its associated protocols. Mitosis redefines DeFi LPing on both the yield provider (protocols) and liquidity provider (Mitosis LPs), and it concludes by leveraging EOL to build a miAsset-based ecosystem on its L1.

Participants in this program will have the opportunity to experience Mitosis’ fundamental functionalities, including deposit and redeem. Deposit assets, receive miAssets, and hold them to earn various MITO Points through Expedition. Participants can also redeem miAssets, retrieve underlying assets, and make deposits on other compatible networks.

As Expedition begins to support new assets other than weETH, numerous expeditions will exist during the campaign to support various assets. Each expedition’s MITO point will be determined separately based on the type of assets. In addition, each MITO Point from each expedition will be allocated differently in future $MITO airdrops. For example, MITO Point (weETH), MITO Point (xxxETH), and MITO Point (yyyETH).

The Mitosis Expedition has various purposes:

• Liquidity Bootstrapping: By rewarding users to deposit assets in Mitosis Vaults, the protocol can rapidly increase liquidity reserves, making it more appealing to potential partners and users.
• Community Building: The Expeditions campaign contributes to forming an active community of early adopters who care about the protocol’s success.
• Token Distribution: Expedition participants can earn MITO Points, eventually providing them eligibility for Mitosis governance token ($MITO) airdrops, ensuring that governance rights are distributed fairly and widely.

The Mitosis governance token ($MITO) is essential in the protocol’s decision-making processes. Token holders can vote on governance issues, influencing the protocol’s operation and future growth.

Conclusion

Mitosis is a significant step forward in the development of cross-chain liquidity protocols. Mitosis intends to improve liquidity providers’ efficiency, security, and usability in the multi-chain DeFi landscape by introducing the concept of ecosystem-owned liquidity and using cutting-edge interoperability solutions. Mitosis might unlock the full potential of an efficient DeFi ecosystem by facilitating smooth liquidity flow between various blockchain networks and providing individual LPs with institutional-grade capabilities.