Product Update Issue 10: C-OP Hatching Full Speed Ahead

TLDR

C-OP Hatching going well with 50 testers, 100+ policies bought, 30+ policies expired, and 20 + policies claimed.

ULend Dashboard C-OP module in progress. We introduce the C-OP utilization factor.

C-OP Hatching Program: over the hump

The Testnet beta of C-OP kicked off last week, with participation from 50 testers.

All major functionality of buying policies with strikes above and below the current market (aka spot) price of the collateral, adding liquidity, expiring policies, and claiming policies worked.

Feedback from testers is positive, appreciating how clean the UI is and how simple it is to perform all tasks. We are definitely glad to hear that!

Some testers confused the collateral being optimized by C-OP with the payment for the C-OP, so it’s worth clarifying.

1. The collateral being optimized (or protected) by C-OP is what determines the payout of C-OP. If the price of the collateral optimized drops below the C-OP strike price, then the C-OP policy can be claimed. In our test case, the collateral is ETH.
2. The crypto for purchasing C-OP, and for receiving payouts from valid claims, is a stablecoin. It is not the same as the collateral optimized. In our test case, the payment crypto is DAI. There may be future products where the collateral optimized or protected is a stablecoin as well (e.g., protection for stablecoins from losing a peg).

Issues during testing:

1. Our testers provided very good feedback on our UX, which we will do our best to work into our roadmap.
2. Two issues preventing the purchase of policies during volatile market conditions were caused by our failsafe, which triggers when there is a difference of price feeds between pricing engine and smart contracts. This back-end failsafe is an added protection on top of the price slippage protection on the purchase UI. The dual-layer protection helps users get the best price possible at the time of purchase. Due to us testing different price feeds in Testnet, the failsafe was triggered more often than it should have been. So the good news is, our failsafe works! In production, we will choose a consistent provider of price feeds, which would prevent these type of issues.
3. We identified a better balance on premium distribution for liquidity providers wishing to withdraw, and those providers who are keeping liquidity in pool longer. We are updating the algorithm and should be complete by middle/late next week. Once deployed to Testnet, we will wrap up the hatching program with final withdrawal tasks and go into formal audit.

Stats from Hatching Program:

1. Over 100 protection policies written, both below and above the market price of collateral being optimized (ETH).
2. 30+ protection policies expired.
3. 20+ protection policies claimed and paid.
4. 100+ deposit and claim payout transactions in liquidity pool.

ULend: C-OP Utilization

We designed a new version of the C-OP dashboard to reflect utilization of C-OP.

What is C-OP utilization rate? And how can it be less than 100%?

The C-OP utilization rate shows what percent of a C-OP is currently used in optimizing. Two simple examples to clarify:

1. Example 1–100% utilization: If a C-OP has 1 ETH amount with strike of $1,800 and the current market price of ETH is $1,800 and the user also has 1 ETH in deposit, then the C-OP is being 100% utilized with maximum amount of $1,800.
2. Example 2–50% utilization: If a C-OP has 1 ETH amount with strike of $1,800 and the current market price of ETH is $1,800 and the user has 0.5 ETH in deposit, then the C-OP is being 50% utilized with maximum amount of $900. This 50% utilization is due to the user having only 0.5 underlying ETH compared to the 1 ETH amount in C-OP.

After various iterations on ULend’s C-OP weighting algorithm to balance gas costs with locking maximum value for borrowers, we settled on checking every C-OP at time of deposit / purchase at time of borrow against:

1. The user’s max protection capacity.
2. The user’s underlying collateral crypto that can be optimized with C-OP.
3. The current spot vs. C-OP strike price.

ULend maximizes the amount that a C-OP can optimize given the above 3 factors. If a C-OP in ULend is less than 100% utilized, then a user can choose to Optimize again by clicking on the Optimize button. This action will cost additional gas for the user.

For more info, follow us at:

Website: https://www.unn.finance/

Twitter: https://twitter.com/unnfinance

Telegram: https://t.me/UNNFinance

Telegram ANN: https://t.me/UNNFinanceANN

Disclaimers:

1. UNION is not an insurance company and UNION does not sell policies of insurance.
2. UNION is not an issuer of CDOs.
3. We are in rapid development phase, and the screens may or may not look like these in final product. Some of the numbers shown are placeholders.