Unified Liquidity Reserve Proposed for DeFi Trading and Lending

Everything Protocol proposes using one unified liquidity reserve to support multiple financial functions in DeFi trading and lending. This design aims to reduce liquidity fragmentation, where different DeFi services often rely on separate pools of capital.

The project's new whitepaper outlines a mathematical model for the system, including measures to maintain solvency during periods of market stress. The protocol uses an internal price band rather than relying on an external price oracle for credit decisions.

Liquidity providers can earn trading fees while their capital supports multiple financial functions. Borrowing and liquidations rely on shared liquidity, with lending capacity based on the capital that would ultimately absorb liquidations.