Union Finance
Explanation for beginners (In Simple Words):
What is Union Finance ?
It is platform to lend and borrow money for the member of union protocol.
What network does is support ?
Mainnet — Ethereum (v1), Optimism (v2), Arbitrum (v1).
Testnet — Ethereum Goerli (v1), Arbitrum Goerli (v1), Optimism Goerli (v2)
How much money you can borrow ?
The amount money you can borrow depend on how much DAI you have been vouched for (trusted).
How to become member?
Head over to http://app.union.finance/ and follow the following steps.
- Stake/deposit DAI token to union protocol. You will start earning UNION governance token.
- Get 3 members who can trust you. Share your vouch link to members to vouch you.
- Claim your UNION governance token once you have earned 1 token.
- Once claimed, burn 1 UNION to become a member, unlock benefits, and start building your credit network.
What are other use-cases ?
- 1 → 1: This is a lot of overhead for the use case of a single person lending a friend $20. (Passive Nature: When you borrow from a friend)
- Many → 1: Groups working together: 3 people vouching $100 for a 4th, gives the 4th access to $300.
- 1 → Many: a single Underwriter vouching for a param, a DAO providing it’s members a credit line
- Many -> Many: All of the above contributing
What does Union do that wasn’t previously possible?
- Creates efficiency. 1 DAI can be vouching for multiple accounts and contracts until it’s actively borrowed.
- Brings real world trust on-chain while retaining pseudonymity.
- A whole market of new businesses in between 0%-150% LTV products.
- Smart Contracts/DAOs get with credit lines.
- Invest by extending credit.
- There’s additional UX mechanisms and experiences you can create to incentivize vouching for different behaviors ie vouch for charity (microfinance), invest in a dao by vouching (instead of a convertible note), etc
