Unibright and DeFi //Freequity Trading Component Demo
In former blog posts, we have shared Unibright Freequity, our vision of a 360° security token platform, and have presented details to our liquidity and custody components. In this blog post, we take a look at DeFi in general and how Unibright, Freequity and Baseline add to the picture. We also show a walkthrough of our Freequity trading component, offering a white-labeable marketplace based on automated liquidity.
What is DeFi
DeFi (decentralized finance) is a system of open, permissionless, and interlocking financial products. In use, DeFi is an overlapping network of Dapps and smart contracts mostly built on Ethereum with a focus on financial applications such as tokenization, lending, derivatives, exchanges, trading, etc. The great innovation around DeFi focuses on the concept of “money Legos (building blocks)”–the idea that anyone is able to create, modify, mix, link, or build on top of an existing DeFi product. DeFi protocols are modular so they can stack on top of each other to build an increasingly denser system of interoperating parts.
In stark contrast, the traditional finance market is centralized, with central authorities issuing the regular currency that drives the economy and is used for every trade. Therefore, the power to manage and regulate the flow and supply of these currencies in the market resides with them. Additionaly, control of assets is passed to financial organizations like banks with hopes of earning some interest or just for safe deposit. The problem with this is since all the control and funds are centralized, the power and the risk is also at the center, meaning in the hands of very few.
The various products involved in DeFi are also collectively referred to as open finance, since blockchains, digital assets, open protocols are integrated with conventional financial structures.
Freequity and DeFi
So where does Unibright and Unibright’s Freequity fit into the DeFi picture? Amongst other things, Freequity covers the token definition and issuing part, setting up liquidity pools, simulation and trading — all based on automated liquidity. Freequity is Unibright’s approach towards a regulatory compliant 360° security token platform — a platform that covers all relevant stages of a tokenization process and integrates them into markets and system landscapes.
All the elements shown in the diagram above, reflect components of Freequity, adding value to the DeFi space by offering products and services to build DeFi’ed solutions and tokenized markets. The most prominent ones are:
- Code generation and automation: with a multitude of tokens and software components needed for different assets and DeFi use cases (real estate, tokenized business objects like invoices, …), a solution is needed that generates the tailormade token for a specific use case automatically. This approach allows a scalable solution to fulfil enterprise demand.
- Guaranteed liquidity: DeFi tokens may have a very specific use case and only be traded amongst a small audience. Therefore we offer an automated liquidity concept including a whitelabeable marketplace (exchange), based on liquidity pools to always guarantee a liquid and compliant means of trading tokens.
- Integration: Transactions occurring in DeFi processes need to be pushed back into off-chain systems used by enterprise players like financial institutes or manufacturing companies e.g. factoring an invoice.
- White label solution: One aspect of integration for many customers is the opportunity to white label Freequity components. Therefore the token issuing solution as well as the liquidity pool based exchange can be white labeled and adjusted to the customers needs. In fact we (code-) generate these components based on the specific needs of our clients, for example reflecting their company look and feel or adding and removing functions.
- Compliance/adaptability: A heavily parameterized token issuing process allows the issuer to create a token that fulfils KYC, AML and other demands specific to its use case. The same holds true for the exchange solution which can be adjusted by configuration to different requirements.
Baseline, Unibright, Freequity and DeFi
The Baseline Protocol creates the opportunity for compelling enterprise blockchain solutions, enabling secure and private business processes via public Ethereum Mainnet. Unibright plays a major role in developing the Baseline Protocol, with the Unibright Framework being “baseline ready” to support visual smart contract modelling, generation, connection and monitoring of baselined processes. As an example, Unibright showed a demo of multiple companies digitally managing purchase orders and volume discount agreements across SAP and Microsoft D365 systems, as described in the official press release as well.
- The Baseline Protocol addresses the main demands for enterprises looking to use blockchain technology: privacy, permission, performance.
- The Baseline Protocol enables confidential and complex collaboration between enterprises without leaving sensitive data on-chain.
- The Baseline Protocol uses the Ethereum Mainnet as a common frame of reference: always on, unrestricted, pay-per-use.
This unique feature set makes the Baseline Protocol a very valuable asset for tokenization and DeFi, and leaves enterprise data safely in traditional systems. Adding privacy and permission to tokenized assets and DeFi use cases is a vital demand for many fields.
For example the application of zero-knowledge cryptography (namely zk-SNARKs) allows baselined DeFi applications to give Ethereum based token transactions the same grade of privacy as would be expected from Zcash. Another application of the Baseline Protocol and zero-knowledge cryptography lies in managing processes that rely on a joint constraint and rule system that has to be followed by all participants. Such a system can automatically be enforced by the Baseline protocol using SmartContracts and zero-knowledge proofs.
Unibright has many touching points with DeFi in Baseline:
- Generating tokens automatically out of baselined processes, e.g. tokenized invoices
- Adding Freequity components on top of generated tokens, e.g. adding liquidity for factored tokenized invoices
- Visually defining baseline circuits to baseline ownership transferal, notarization and integration of tokenized assets into offchain systems
DEMO of Freequity Trading Component
And now just for fun and to show some output from our “buidl, buidl, buidl”-efforts — a demo walkthrough of the Freequity decentralized exchange: https://tradingdemo.unibright.finance/
The solution can fit the demands of the vast majority of DeFi applications because it is: integrateable, baselineable, white labelable, automatable and customizable :-D
The component can be used for trading tokenized assets against stable coins, based on our liquidity pool concept. The software architectural concept uses a hybrid approach containing a blockchain based transaction settlement and a real-time centralised web frontend. To make demo access easier, we implemented a “Dummy wallet” that does the signing of blockchain transactions, so that users do not have to use software or hardware wallets to try out the demo.
The above screenshot shows the application which offers the following functionalities:
- Creating orders (buy/sell)
- Switching the trading pair and wallet connection
- Observing the current price that is determined by asset token and stable token pool sizes
- Displaying a diagram/chart section showing price, pool sizes and combined buy/sell pressure
- Executing trades by users
- Executing trades on overall market
The following descriptions and images showcase a trade (buy/sell of asset tokens against a stable token) and the corresponding blockchain transactions.
- Buying or selling asset tokens against the liquidity pools “look and feels” like an exchange. After executing the trade, the price adjusts instantly along with the pool sizes, the token balances within the wallet reflect the trades when the transactions get settled within the blockchain.
2. The corresponding blockchain transactions (trading asset token against stable token) of course can be seen and verified with any blockchain explorer. We added a link for doing so to the wallet popup.
This liquidity-backed exchange service offered by our 360 degree tokenization platform, not only guarantees buyers and sellers will exchange tokens on the same legal base where issuance took place, but it also allows the platform provider (and all participants by kick-backs) to benefit hugely on the trading fees occurring with every trade.
Check it out here: https://tradingdemo.unibright.finance/
Next steps
Many Freequity components add extraordinary value for professionals in the context of integration, baselining and everything that Unibright offers. We just showed a demo of one component, and in the next weeks and months, we will keep on building and showcasing application scenarios for tokenization, De-Fi and corresponding integration in the blockchain space.
Unibright is a team of blockchain specialists, architects, developers and consultants with 20+ years of experience in business processes and integration. Unibright turns ideas into businesses, and improves processes with the help of blockchain technology.
Unibright develops enterprise solutions, invests in start-ups, builds process modelling tools and integration platforms and offers a 360° ecosystem around tokenized assets.
Verticals of https://unibright.io
Learn more by visiting the Unibright website, Twitter and Medium.
