Unreal Finance, why is this service in high demand? Earn future yield instantly. Discover the characteristics of this DeFi project.
Unreal finance is an unrealized return futures platform where users can lock in fixed interest rates for loans and borrowings.
Unreal Finance is a yield futures platform that allows users to tokenize their future yields via smart contract interactions.
This enables lenders to lock in their interest rates, speculate on & trade interest rates across multiple protocols, enable interest rate arbitrage between different protocols, or be able to sell theirinterest early.
Unreal Finance, why is this service in high demand?
In traditional finance, lenders are able to trade loan contracts based on collateral and interest associated with the contract to either add risk or de-risk their positions.
By tokenizing interest rates, users can lock in fixed interest rate yields and are able to freely trade their interest up front, unlocking additional fund utilization for their collateral in a decentralized manner.
This allows for 2 routes of decentralized lending: uncollateralized loans and fixed interest rates on yield.
This concept offers all these functionalities thanks to UTokens (synthetic protocol tokens) and UOS tokens (platform native tokens).
Protocol:
To allow decentralized lending protocol users to set a fixed interest rate on their yield for a fixed period of time, they will deposit their yield token (cUSDC, aDAI etc.) into the Unreal Smart.
Contract. Two tokens will be issued: UToken and UOS.
UToken
UToken is a synthetic token minted by the protocol. UToken represents the future yield that will be generated. For example, a cUSDC-UToken represents the future yield generated by our capital inside Compound’s USDC lending pool. A UToken is just an ERC20 token and there are various ways to trade this synthetic token on Ethereum.
UOS
UOS is a token that was created by the platform.. A user receives UOS tokens equivalent to the amount of underlying asset deposited.
For example, 100 cUSDC deposited on Unreal Finance will generate 100 cUSDC-UOS tokens. The user can redeem the UOS for an equivalent amount of underlying tokens from the contract when he wants to exit.
Unreal Finance, FAQ:
What is the benefit of using this platform?
By using Unreal Finance, a user can instantly sell their unrealized yield, thus locking in their interest rate at a fixed price. In addition, traders can now speculate on the unrealized return.
How did Unreal Finance start?
The idea behind this concept comes from the frustration experienced by yield farmers when the yield interest rate drops. While the high net worth individuals are okay with high fluctuations in interest rate, the retail lender is not. And that’s where Unreal Finance comes in – by tokenizing the yield, a user can lock in their interest rate.
Will Unreal Finance utilize a Native Token?
Yes, a native token called Unreal Governance Token or UGT for short. . The token will have multiple use cases relating to governance, platform fees, and much more.
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