What is Fluid (FLUID)?

Deep Dive

1. Purpose & Value Proposition

Fluid addresses capital inefficiency in decentralized finance by merging lending markets and a decentralized exchange (DEX) into one liquidity layer. Instead of siloed pools, every deposited asset can be used as collateral, borrowed, and simultaneously provide trading liquidity. This design aims to maximize the utility of every dollar, offering lenders competitive yields and borrowers access to leveraged positions with low liquidation penalties—as low as 0.1% (Fluid).

2. Technology & Architecture

The protocol is built around a core unified Liquidity Layer—a smart contract that manages all deposits and loans. Above it, modular sub-protocols handle specific functions like lending or swapping, but all draw from the shared pool. Its key innovations are Smart Collateral, which lets LP tokens earn fees while pledged, and Smart Debt, where borrowed funds are automatically deployed as DEX liquidity. This architecture enables a theoretical leverage of up to 39x, particularly efficient for stablecoin or correlated asset pairs (MEXC News).

3. Tokenomics & Governance

The FLUID token governs the protocol, with holders voting on upgrades and parameters. While protocol revenue is not currently distributed to token holders, the team has outlined a growth strategy that includes using a portion of revenue for buybacks. The goal is to create a sustainable economic flywheel, aligning protocol growth with token value. The total supply is 100 million, with about 77.5 million in circulation (CoinMarketCap).

Conclusion

Fluid is fundamentally a capital-efficiency engine for DeFi, merging lending and trading into a single liquidity system to maximize asset utility. How will its upcoming DEX v2 upgrade further redefine on-chain capital efficiency?