Instadapp Flows into Fluid: Shared Liquidity Layer Combines Lending, Borrowing, and DEX

Instadapp has undergone significant changes since its inception in 2018 as a decentralized finance (DeFi) dashboard and smart-account layer. The platform, which initially supported popular DeFi protocols like Aave, Compound, Maker, and Uniswap, has now pivoted to Fluid, a shared liquidity layer that enables lending, borrowing, vaults, and a decentralized exchange (DEX) to use the same capital.

The migration of the INST token to FLUID is 1:1, and users can still access Avocado, the smart-wallet product, as well as Instadapp Lite, which offers a simpler vault path. The platform primarily operates on Ethereum but also supports other layer-2 solutions such as Arbitrum, Base, and Polygon.

One of the core strengths of Instadapp is its ability to offer high capital efficiency through smart collateral and smart debt, which also comes with increased liquidation and smart-contract risk. Experienced DeFi users who understand oracles, liquidations, and upgradeable contracts may find Instadapp appealing for its efficient lending and DEX routing capabilities.

Fluid Lend has recently sat among the larger money markets by total value locked (TVL), with Fluid DEX using debt as trading liquidity. Audits have been conducted across Fluid and DEX v2 releases, ensuring a high level of security. However, users should be aware of potential considerations such as novel leverage and shared-liquidity design being less battle-tested compared to Aave or Uniswap in isolation.