Unified liquidity allows long-tail assets to have leverage opportunities without oracles, improving DeFi

In the world of decentralized finance (DeFi), reliance on oracles for pricing data remains a crucial point of failure, hindering the scalability of long-tail tokens. This limitation has led to a concentration of total value locked (TVL) in BTC, ETH, and stablecoins on DeFi protocols.

A breakthrough in DeFi comes with the concept of unified liquidity, which allows long-tail assets to have the same leverage opportunities as blue-chip tokens without the need for oracles. This innovation opens up a new frontier for a truly permissionless margin and lending market.

The absence of permissionless shorting in the crypto market creates opportunities for manipulation and the proliferation of scam tokens. Implementing robust permissionless shorting capabilities could lead to a healthier and more balanced market environment.

Unified liquidity offers a solution to the inefficiencies and lack of clearing mechanisms in the crypto market by enabling protocols to recycle collateral and borrow from live DEX liquidity. This approach enhances capital efficiency and allows for the development of a sustainable financial infrastructure in DeFi.

Permissionless shorting is seen as a critical component for building a healthy and robust long-tail market in DeFi. By embracing unified liquidity and implementing permissionless shorting capabilities, the industry can establish a foundation for sustainable growth and market integrity.

Read more at Cointelegraph: Unified Liquidity Enables The First Permissionless Long-Tail Leverage Market