UniLend (UFT) is a DeFi protocol enabling the lending and borrowing of any ERC20 token, combining spot trading and lending/borrowing functionalities.

Trading most ERC-20 tokens on a single platform offers users unparalleled convenience and efficiency, streamlining decentralized finance (DeFi) activities. This ease of access allows for seamless integration of various tokens, reducing the need for multiple platforms and enhancing user experience. With features like lending, borrowing, and trading all in one place, it simplifies asset management and maximizes potential returns. UniLend embodies this innovative approach, providing a comprehensive solution for the diverse needs of the DeFi community.

What is UniLend (UFT)?

UniLend Finance was established in 2020 to overcome the limitations of existing DeFi platforms, which supported only a select few Ethereum-based assets, leaving many inaccessible. Founded by Chandresh Aharwar, who has experience with Matic Network, and co-founded by Tarun Malik and Suryansh Kumar, UniLend aims to democratize decentralized finance. The UniLend Finance platform was launched in 2020, and on October 15, 2022, the native utility token, UFT (UniLend Finance Token), was introduced, enhancing the platform’s functionality.

UniLend allows for permissionless listing, enabling any ERC-20 token to be listed without any entity controlling the process. This makes lending and borrowing accessible to a wide range of assets. The platform supports over 9,000 assets, providing lenders with the flexibility to choose the assets against which they wish to lend by selecting corresponding pools.

A significant milestone for UniLend occurred on February 13, 2024, with the launch of UniLend V2 on the Ethereum Mainnet. UniLend V2 is the first-ever permissionless lending and borrowing protocol for all ERC-20 tokens, opening doors to DeFi for everyone and revolutionizing the digital asset landscape. This update allows users to create dual asset pools, enabling permissionless lending and borrowing for any asset pair, thus expanding the accessibility and functionality of decentralized finance. UniLend’s innovative approach positions it as a DeFi leader, offering its users unparalleled access and flexibility.

How Does UniLend Work? Architecture and Products

UniLend Finance’s architecture is designed to offer a unique and secure approach to decentralized finance (DeFi) lending and borrowing. At its core is the Dual Asset Pool model, which allows users to create isolated ERC20/ERC20 pools for any asset pair. This model ensures that the volatility of one asset does not affect the entire protocol, as is common in other DeFi platforms like Aave or Compound which use a cross-pool mechanism. By isolating asset pools, UniLend enhances security and stability, allowing users to lend and borrow assets without the risk of systemic disruption.

The interest rate model employed by UniLend is dynamic and efficient, adjusting rates based on the supply and demand for each asset within a pool. The utilization ratio (U) integrates demand and supply into a single variable, directly influencing the borrowing interest rate. When demand for an asset is high, interest rates increase, incentivizing more supply. Conversely, low demand results in lower interest rates, encouraging borrowing. This adaptive mechanism ensures an equilibrium that benefits lenders and borrowers, with interest rates reflecting real-time market conditions.

UniLend utilizes on-chain price oracles from sources like Chainlink, Band Protocol, and Uniswap V3 TWAP to provide reliable price feeds. These oracles ensure accurate pricing information, which is critical for properly executing lending and borrowing activities. By integrating multiple sources, UniLend enhances the reliability and accuracy of its data feeds, adapting flexibly to market changes and innovations without altering its core architecture.

Liquidation within UniLend is handled through an innovative Concentrated Liquidations mechanism. This allows liquidators to manage multiple eligible loans within a single transaction, rather than addressing them individually. This approach increases efficiency and maintains the system’s stability during market crashes by preventing a surge in liquidations. The mechanism involves bots monitoring pending transactions, a DEX for selling liquidated collateral, and smart contracts facilitating the process, ensuring that loans remain sufficiently collateralized.

Source: unilend whitepaper

UniLend V2 introduces Non-Fungible Liquidity, where liquidity positions are represented as non-fungible tokens (NFTs) rather than ERC20 tokens. These NFTs serve as equity certificates, encapsulating multiple data points such as token addresses, lending and borrowing balances, interest rates, and maturity dates. This detailed representation allows for better management of lending and borrowing variables, providing users with transferable liquidity positions that can be traded in secondary markets.

Overall, UniLend’s architecture prioritizes security, flexibility, and efficiency, making it a robust platform for decentralized finance. The next section will explore various products offered by UniLend, further highlighting its comprehensive approach to DeFi.

Products

UniLend Finance offers a comprehensive suite of products designed to facilitate decentralized finance (DeFi) activities, including lending, borrowing, and flash loans. These products leverage the platform’s innovative architecture to provide users with secure, efficient, and flexible financial services.

UniLend allows users to supply any ERC20 asset or similar standards across multiple blockchains, earning variable interest rates based on market conditions and pool interest models. Users who supply their assets receive liquidity positions as Non-Fungible Tokens (NFTs), representing their right to redeem the lent assets from the pool. This system also mitigates the risk of depleting lendable assets and ensures lenders can redeem their assets when needed. Automated liquidation programs act as a buffer, maintaining liquidity and system stability.

Source: unilend whitepaper

For borrowing, users must pledge collateral that is locked in the protocol. Collateral earns interest while in the protocol but cannot be redeemed or transferred during this period. Borrowers can access loans based on the collateral factor of their pledged assets, with interest accruing per block. The borrowing process includes various parameters like collateral factors, reserve factors, and liquidation thresholds, all designed to maintain system health and incentivize participation.

Source: unilend whitepaper

UniLend also offers flash loans, enabling users to take out uncollateralized loans as long as the borrowed amount and fees are returned within the same transaction. This feature unlocks numerous use cases, including arbitrage, collateral swaps, and market-making. UniLend’s flash loans are cost-effective, with a low fee structure that benefits both lenders and the platform’s reserves. Additionally, UniLend supports innovative token technologies such as synthetic tokens, broadening the range of possibilities for users and enhancing overall platform utility.

UniLend’s products are built on a robust and flexible architecture that prioritizes security and user empowerment. The next section will explore the diverse range of financial products UniLend offers, further demonstrating the platform’s commitment to innovation and accessibility in the DeFi space.

UniLend Use Cases

UniLend’s architecture and features make it suitable for several innovative use cases, enhancing the overall utility of digital assets.

• Lending and Borrowing: UniLend’s dual asset pool model enables users to supply and borrow any ERC-20 token, creating a decentralized money market. This flexibility allows users to earn interest on their idle assets and access liquidity by using their digital assets as collateral. The platform’s isolated pool structure ensures security and minimizes risks associated with asset volatility.
• Flash Loans: UniLend’s flash loan feature allows users to take out uncollateralized loans, provided the borrowed amount and fees are returned within the same transaction. This capability supports various use cases such as arbitrage opportunities, collateral swaps, and efficient market-making strategies. The low fee structure of UniLend’s flash loans makes them cost-effective, benefiting both lenders and the platform’s reserves.
• Token Swaps: UniLend facilitates permissionless token swaps, enabling users to trade ERC-20 tokens directly within the platform. This functionality allows for seamless and efficient token exchanges without needing third-party intermediaries, promoting a decentralized and user-friendly trading environment.

UniLend’s innovative use cases showcase its potential to revolutionize the DeFi space by providing comprehensive financial services for a wide range of digital assets. The platform’s flexibility, security, and cost-effectiveness make it an attractive option for users looking to maximize the utility of their ERC-20 tokens.

What is the UFT Coin?

UFT is the native utility and governance token of UniLend, enabling decentralized lending, borrowing, and trading. Its maximum supply is capped at 100 million units, of which 78.25 (78.25%) are already in circulation (June 2024).

The UFT token plays a crucial role in its decentralized ecosystem. Primarily, UFT facilitates governance within the UniLend protocol. Holders of UFT tokens can propose and vote on various factors that influence the protocol’s proper functioning. These decisions require a majority consensus among token holders to be implemented, ensuring a democratic and decentralized governance model.

Liquidity providers are integral to the sustainability of decentralized finance protocols by providing the necessary liquidity for lending and borrowing activities. To incentivize these providers, UniLend rewards them with UFT tokens through liquidity mining programs. Additionally, liquidity providers earn a percentage of the trading and borrowing fees generated within the protocol, creating a compelling incentive structure to maintain liquidity.

Platform users who lend, borrow, or trade on UniLend are also rewarded with UFT tokens. This encourages the use of the platform’s services and promotes active participation in the governance process. By distributing governance power in the form of UFT tokens, UniLend ensures that the decision-making process remains decentralized and inclusive, aligning the interests of all participants with the platform’s growth and sustainability.

The token distribution for UFT is structured to ensure a balanced and incentivized ecosystem: 10% is allocated for the seed sale, 20% for the private sale, 1% for the public sale, 1% for initial liquidity, 15% for the team, 8% for marketing, 5% for security and alignment, 10% for the reserve, 15% for the ecosystem, and 15% for protocol distribution. This distribution model supports various aspects of the platform, from development and marketing to security and ecosystem growth.

Source: unilend.medium.com

The UFT token is a multifunctional asset that empowers users, incentivizes liquidity providers, and ensures a robust, community-driven governance framework within the UniLend protocol.

UniLend Main Features

UniLend stands out in the DeFi space by offering a comprehensive suite of features that make decentralized finance more accessible and versatile. Key aspects include permissionless listing, flexible pricing, and the innovative Omnis code.

Permissionless Listing

UniLend allows any ERC20 token to be listed without requiring approval from any entity. This is facilitated through the Dual Asset Pool model, where users can create ERC20/ERC20 pools to start lending and borrowing. This isolated model ensures that the volatility of one asset doesn’t impact the entire protocol, unlike other money markets. With over 9000 assets available, this model provides unparalleled flexibility and security for lenders, allowing them to choose the assets they wish to lend against from a corresponding pool.

Flexible Pricing

UniLend integrates price feeds from reliable sources such as Chainlink, Band Protocol, and Uniswap V3 TWAP oracle. These oracles ensure accurate pricing data for both mature and newly traded assets on the Ethereum chain. UniLend’s V2 architecture is adaptable, supporting various oracles without altering the core protocol. The Dual Asset Lending Pool model further enhances risk mitigation and flexible lending options. Loans are collateralized and represented by Non-Fungible Tokens, which accrue interest, with parameters like collateralization ratio and interest rate tailored to different assets.

Omnis Code

UniLend’s Omnis code expands the DeFi horizon by integrating Fiats, Synthetic assets, Stocks, NFTs, Metaverse, and Real-World Assets into the lending and borrowing ecosystem. Developed over a year by CTO Suryansh Kumar and his team, Omnis is a multi-contract DeFi protocol designed to support permissionless lending and borrowing of any ERC20 asset. The protocol includes functions for creating pools, lending, borrowing, redeeming, and liquidating assets. Additionally, UniLend introduces flash loans, allowing uncollateralized borrowing within a single transaction, which opens up numerous use cases like arbitrage and collateral swaps.

UniLend combines these features to create a robust, flexible, and user-friendly platform for decentralized finance, aiming to revolutionize how assets are managed and utilized in the DeFi space. This holistic approach ensures that UniLend remains at the forefront of innovation in the financial industry.

Is UFT a Good Investment?

UniLend’s UFT token has potential due to its platform allowing the trading of most ERC-20 tokens, which could attract many DeFi users. This broad accessibility may significantly increase usage, as it addresses a common limitation in DeFi platforms. However, success is not guaranteed. Factors such as competition from established platforms, regulatory challenges, and the inherent volatility of the cryptocurrency market could impact its growth. While UniLend’s features are promising, how it will perform in a rapidly evolving and competitive DeFi landscape remains to be seen.

How to Own UFT?

To own UFT, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account, and get it verified and funded. Then you are ready to go through the steps to buy UFT.

News on UniLend

According to what was announced on the official UniLend blog in February 2024, UniLend V2 has prioritized security by undergoing successful audits by Peckshield and Slowmist. The platform conducted two bug bounty programs with Immunefi, offering up to $25k for vulnerability detection. UniLend V2’s testnet attracted over 12,000 users, surpassed 100k transactions, and launched 50+ liquidity pools, demonstrating robust functionality. These measures underscore UniLend’s commitment to providing a secure, trustworthy DeFi environment, ensuring user asset and data protection.

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