Unified Reserve Aims to Cut DeFi Fragmentation

Everything Protocol has proposed a unified liquidity reserve for decentralized finance (DeFi) trading and lending, aiming to reduce fragmentation in the space.

The protocol's new whitepaper outlines a system where a single reserve supports multiple financial functions, including swaps, lending, leverage, and limit orders. This would allow the same capital to earn trading fees while supporting credit markets and lending yield for resting limit-order funds.

The proposed design replaces external oracles with an internal price band and ties borrowing and liquidations to shared pool liquidity. This is intended to cut DeFi fragmentation by allowing liquidity to move between trading, lending, and order activity.

The protocol acknowledges that the model still carries risks, including delayed withdrawals, potential losses for junior liquidity providers, governance and upgrade risks, and delays from the internal pricing mechanism.