Introducing the Unifi Protocol — White Paper
Update Q2 2021 — Unifi’s Whitepaper was written prior to Unifi Protocol’s launch. Much of the information in this original whitepaper is now out of date, or has changed as the Protocol has grown. Please refer to Unifi and uTrade’s current documentation for the most updated information.
Unifi Protocol is a group of non-custodial, interoperable, decentralized, and multi-chain smart contracts providing the building blocks for the next generation of DeFi development. Unifi provides a bridge to connect the existing economy of Ethereum-based DeFi products to growing DeFi markets on other blockchains. Unifi utilizes the time tested SEED Bridge to connect any Ethereum or EVM/NVM-based DeFi products to other blockchains.
The Unlimited Potential Token (UP) is at the core of Unifi’s DeFi system. UP minting occurs in direct proportion to the fees and other revenue generated by the entire Unifi Protocol. This includes designated fees or revenue from all Unifi-developed platforms, as well as from any projects developed by others which utilize Unifi Protocol. The minting process is designed to ensure the redemption value of all UP tokens must go UP every time a new UP token is minted. UP token creates a very unique and lucrative rewards structure for all holders, protocol users, and liquidity providers.
Unifi Protocol is designed around a decentralized autonomous organization (DAO) governed via a decentralized governance token.
The following are highlights taken from the full Unifi Protocol whitepaper. The complete white paper is available here: Unifi White Paper
Introducing Unifi Protocol
- Unifi Protocol unifies the multi-chain DeFi world through the SEED Bridge. This allows Unifi to be a multi-chain and non-custodial decentralized swap and complete DeFi protocol.
- Unifi Protocol features incentivized liquidity pooling, a fee sharing governance token, loyalty rewards token, lending platform, and cross-chain swap interoperability.
- Unifi was developed by Sesameseed, the multi-chain staking community committed to bringing their innovative technology solutions to all their represented blockchains.
- Unifi Protocol adds value to each blockchain upon which it is deployed, allowing developers to build a range of products and services around the smart contract based building blocks of the protocol.
What is uTrade (and how does it relate to Unifi)?
- uTrade is a trading platform built utilizing Unifi Protocol.
- uTrade operates as a decentralized, unlimited liquidity market maker, where one token is exchanged for another, utilizing liquidity provided by incentivized liquidity providers.
Why is uTrade better than existing trading platforms?
- Liquidity providers share a portion of the revenue generated by the entire Unifi Protocol, and are not limited to a share of fees earned solely from a specific trading pair.
- Even after liquidity is withdrawn, liquidity providers continue to share in fees as long as they hold UP tokens.
- Traders are refunded a portion of their trading fees in SEED and enjoy all the benefits of holding SEED such as daily compounding. uTrade is the only platform to offer a trading rebate which automatically stakes on multiple blockchains and earns increasing rewards.
- Enabled by the power of the SEED Bridge, uTrade will allow for the non-custodial trading of tokens from different blockchains.
More information on UP Token
- Each blockchain where Unifi Protocol operates will have a designated base token in which fees and revenue is collected. For example these will be ONG on Ontology, ONE on Harmony, and TRX on Tron.
- The redemption value of UP tokens is the amount of base tokens Unifi Protocol will return in exchange for the UP token.
- During the UP minting process, an amount of base tokens (normally a percentage) are dedicated to raising the redemption value of all previously minted UP tokens. This amount of base tokens is known as the Power UP Rate (PUR).
- This redemption value of UP is verifiable on-chain, and increases every time new UP token is minted.
- Unifi anticipates the market value of UP could greatly exceed the redemption value of UP, and a rising redemption value could provide an increased positive market price pressure.
- As Unifi Protocol matures and the community grows, UP tokens will be used to enable decentralized governance. Utilizing UP token as the governance token will allow those who have supported Unifi the most to provide the most input in its governance.
- UP holders receive a share of fees generated by other platforms created by any developer using Unifi Protocol.
What is uLend?
- uLend is a lending platform built with smart contracts based on Unifi Protocol.
- uLend will allow UP token holders to preserve their ability to receive a share of further Unifi Protocol revenue, while still utilizing the redemption value of UP. This value can then be used to take advantage of market movements, cross chain trading, margin trading, or any other use the borrower may desire.
- Unifi Protocol will allow uLend to create loan products to temporarily extract value from other collateralized tokens as well.
- By utilizing the SEED Bridge, uLend could provide an opportunity to take a collateralized loan on one blockchain, and use the resulting funds on another. For example, a user who held UP token on Ontology could take out a loan and then use those funds to take advantage of the market movement of an Ethereum token.
Edit 9–2020 — Updated Link to Current version of the white paper — V1.2