Union’s Demo Release: A Polygon Experimental Network [APENET]

“Union Symposium” by Liam

We believe the new decentralized economy can and should work for those without assets.

In pursuit of that vision, we’ve built Union, a permission-less credit network that enables a crypto-native form of credit, as well as a number of new financial primitives.

We’ve been testing the protocol on Kovan for the last few months, yet there are likely a number of risks and learnings that will only reveal themselves when dealing with real money.

To mitigate those risks prior to deploying a fully permission-less protocol where we can’t limit the funds at risk, we’ve deployed a demo version of the Union Protocol on the Polygon network.

This demo version has deposit limits (500 DAI via the frontend & 1,000 DAI via direct contract calls), uses a non-transferable faux Union token (FUN) as a governance token, and has centralized admin & pause controllers. In addition, Polygon allows users to experiment with smaller amounts that wouldn’t be economically viable on L1 Ethereum.

Some of the key risks we are looking to identify and mitigate:

• Smart Contract Risk
  While we follow best practices, there could be an unforeseen bug in the code. There really is no substitute for thousands of people trying to break it, either purposely or accidentally, especially when our protocol could interact with others (e.g. AAVE, DAI, flash loans), in interesting ways.
• Economic Risks
  It is possible for the code to work as designed but the economic assumptions result in non-optimal outcomes. While we’ve run agent-based simulations with Gauntlet to test a lot of our assumptions in-silico, people don’t always behave as you’d expect.
• Community Risk
  There are a number of parameters, such as Rate and Risk controls, that are currently controlled by governance either because they’re qualitative or calculating them on-chain is currently prohibitively expensive. Unlike in collateralized systems, where the Rate is purely a function of supply and demand, the Rate in the initial uDAI market is also a function of expected credit risk, which you can’t know until people default.
• Naive User Risk
  It is possible for the protocol to work as designed but people’s expectations diverge from reality. For example, there could be the false belief that having the ability to trust permissionlessly means you should trust everyone.

Taking Part in the Demo

Screenshot of the Union v1 UI (does v1 imply a v2?)

All of the above risks are the highest in the first few months after a main-net launch. To ensure those who fully understand the risks associated with the protocol (and could educate those they vouch for) are the first participants on Union Mainnet,, we’ll be giving first access to those who participate in APENET.

We’ll be doing this by airdropping three tiers of NFTs to those who complete a few tasks to help test the Polygon deployment. [sidenote: How those NFTs work is going to be a pretty fun surprise]. The selection criteria will likely be the below; but we reserve the right to change it entirely if someone tries to game it.

• Common: Become a Member, Borrow, Repay, and not in default at time of snapshot
• Rare: have 3 people you trusted earn Common
• Legendary: Top Accounts based on a secret metric

Onboarding Steps:

1. Bridge some Matic & DAI to your Polygon wallet
2. Make sure your wallet is set to the Polygon network RPC
3. Connect to the demo app at https://union.finance/
4. Stake some DAI to earn the 1 FUN token you’ll need to burn to register.
5. In order to become a member and borrow on Union, you currently need 3 members to vouch for you. If you don’t know any current members, you can ask for vouches in the #request4vouch channel in the Union discord: https://discord.com/invite/cZagzJ3p8G
6. Once you have 3 vouches & 1 FUN token, click the ‘become a member’ button.
7. You should now have a credit line! What will you use it for?
8. Don’t forget to repay at least the minimum payment every payment period(14 days for the first month).
9. Report Bugs here → via this google form or on discord.
10. Follow us on twitter @unionprotocol for updates. And tag us if you use your credit line for anything interesting. :)

Disclaimer: We believe DeFi means freedom to take risk, but also that the ultimate responsibility of your choices lies with you. This is experimental software and due to the nature of smart contracts, there is a very real risk that funds might be lost.

If you are not okay with that possibility, we’d encourage you to wait until insurance protocols like Nexus Mutual cover Union risk. Or test it on Kovan.