UNION JOINS THE UNILEND ECOSYSTEM TO PROVIDE UNILEND USERS WITH HELPFUL TWEAKS
Union joins the UniLend ecosystem and provides tools that users can use to optimize their positions. Union’s main tool that UniLend users can use to optimize their collateral positions is Union’s C-OP product. C-OP is an American-style put option that protects against inefficient guarantees.
UniLend will include the Union’s native token UNN in the UniLend platform as part of the Union’s cooperation. UniLend will also work with Union to explore other areas to work together to add momentum to DeFi.
C-OP AND SECURITY OPTIMIZATION
On decentralized lending platforms like UniLend, users have to deposit a certain number of tokens as collateral if they want to borrow another token. Typically, the amount of collateral is 150% of the value of the loaned coins. For example, if you want to borrow 100 DAI (worth 100 USD), you will need to put 150 USD ETH as collateral.
Union has developed a C-OP tool that UniLend users can use to optimize collateral positions and protect against inadequate collateral. Optimizing collateral positions is something that many lending platforms in this area have not yet explored. It is significant as Unilend is the first to integrate the Union C-OP product to allow users to use collateral more efficiently.
Collateral posted by users on crypto lending platforms is practically left as idol assets and does not benefit borrowers. With C-OP, UniLend can enable borrowers to acquire some protection for their collateral in an unfortunate liquidation state.
Liquidation is the state where the price of the token used as collateral by borrowers in the cryptocurrency markets falls to a certain level. When the price drops enough, a smart contract will execute a sell order for all guaranteed tokens and deliver them to the lender. Since cryptocurrency and decentralized financial markets tend to be very volatile overall, borrowers will benefit greatly from their ability to offset some of their losses in the event of a liquidation.
HOW THE C-OP WORK
C-OP, or Collateral Optimization, is a tool that uses mechanisms very similar to American-style put options to allow borrowers to secure part of their collateral.
With put options based on the US model, a person buys a derivatives contract to sell assets within a certain period at an agreed strike price. In the case of C-OP, UniLend borrowers have the option to use part of their collateral to buy a token called uUNN. With this uUNN token, the user can sell basic margin tokens at an agreed transaction price later. Therefore, the uUNN token works essentially similar to an American-style option but completely decentralized. In essence, C-OP will ensure that UniLend users retain a percentage of their capital in the event of a liquidation.
EXPANSION OF THE ENTIRE DEFI APPLICATION AREA
Decentralized finance is undoubtedly leading to a financial revolution, but there are many challenges to maturity since it is an emerging industry. Collaboration with Union and other industry innovators will optimize multiple batteries within DeFi, especially in decentralized money markets.
Adding C-OP to Unilend’s lending platform opens up the ability for each ERC-20 to leverage 1:1 credit power while offering Union C-OP’s liquidity providers an unlimited number of tokens to support comprehensive protection for liquidity and loans.
Since the inception of decentralized money markets, the collateral obligations of borrowers in this market have been as good as idle capital. Borrowers cannot choose to do anything with their collateral, and there is no way to protect their collateral from the volatility of the cryptocurrency market.
Working with Union, UniLend will be among the first decentralized money markets to offer borrowers the option to use part of their collateral as collateral or protect part of their tokens as collateral.
WHAT IS UNILEND?
UniLend is a decentralized protocol that connects spot trading and money markets through smart contracts with lending and credit services. Unilend offers permissionless listing of assets, and the platform is governed by community stakeholders.
ABOUT UNION
Union is a technology platform that combines protection and liquid secondary market in a multi-token model. DeFi participants manage their complex risks through smart contracts and protocols in a scalable system. Union lowers entry barriers for private users and creates conditions for institutional investors. Union’s full-stack DeFi protection is inclusive, composable, and brings TradFi’s battle-tested capital and price models to the DeFi ecosystem.
