Shared DeFi Liquidity

Definition ∞ Shared DeFi Liquidity is a system where multiple decentralized finance protocols or applications access and contribute to a common pool of digital assets to facilitate trading, lending, or other financial operations. This arrangement enhances market depth and efficiency by reducing fragmentation across platforms. It optimizes capital utilization. This approach fosters greater interoperability.
Context ∞ The concept of shared DeFi liquidity is gaining prominence as the decentralized finance landscape matures, aiming to improve capital efficiency and user experience. News often discusses initiatives or protocols that enable this sharing, analyzing their impact on transaction costs, slippage, and the overall interoperability of the DeFi ecosystem. This development signifies a move towards more integrated DeFi.