Unifi Protocol (UNFI): Bridging DeFi Across Blockchains

While decentralized finance (DeFi) offers many perks over centralized finance, ranging from the lack of intermediaries to new investment opportunities like yield farming and liquidity mining, it remains a fragmented space that’s difficult to scale, with many DeFi protocols only operating on a single blockchain. 

Even when certain DeFi platforms offer multi-chain capability, adoption remains limited, as there are no incentives to use them beyond participants being able to transact on their preferred chain.

Unifi Protocol seeks to gain widespread adoption for DeFi through incentives that fuel user participation across multiple chains.

Read on to learn more about this ambitious and unique project.

Key Takeaways:

• Unifi Protocol is both a multi-chain DeFi protocol and a DAO that incentivizes users to engage in DeFi across multiple blockchains.

• UNFI, Unifi’s governance token, acts as a bridge across supported blockchains and can be staked to earn rewards.

• UP is Unifi Protocol’s utility token, with an ever-increasing redeemable value awarded to Unifi’s liquidity providers.

What Is Unifi Protocol?

Unifi Protocol is a multi-chain DeFi protocol and decentralized autonomous organization (DAO). Its governance token, UNFI, can be used across all supported blockchains to guide the protocol’s direction. 

Unifi Protocol utilizes the concepts of DeFi and cross-chain functionality to create a sustainable, utility-based blockchain model. With its unique smart contracts, Unifi incentivizes people to leverage DeFi products across multiple blockchains. It currently operates on 11 blockchains, including Ethereum, BNB Chain, Polygon and Avalanche, and continuously strives to add more to its network.

Unifi Protocol Blockchain Products

In its efforts to revolutionize blockchain technology, Unifi has developed some unique products:

uTrade V2

Source: uTrade

uTrade V2 is an innovative, feature-rich automated market maker that runs on multiple blockchains. Liquidity providers to uTrade V2 earn UP, a unique token that appreciates in value every time it’s minted. 

In recognition of liquidity providers’ efforts, 100% of all trading fees are awarded to them. Of these 85% are minted into UP tokens and distributed to the liquidity providers of the respective pools. Another 10% are minted into UP and allocated to Super Pairs, specialized liquidity pools on uTrade V2 that offer additional incentives for UNFI holders. The remaining 5% are converted into base tokens within the UP smart contract, enhancing the redeemable value of UP with every trade.

uBridge

uBridge is a multi-chain bridging solution on Unifi that lets you easily bridge to supported blockchains.

The unique thing about uBridge is that it doesn’t use wrapped tokens. Usually, to bridge between Bitcoin and Ethereum blockchains, you need wrapped Bitcoin (WBTC), which you will then have to unwrap, costing you time and money.

However, note that other cryptocurrencies are not supported by uBridge, i.e., it is a single-coin bridging solution specifically designed for the UNFI token.

Source: Medium

However, note that other cryptocurrencies are not supported by uBridge, i.e., it is a single-coin bridging solution specifically designed for the UNFI token.

uStake

Among the first DeFi protocols to integrate proof of stake (PoS) blockchain node staking, uStake is Unifi Protocol’s blended staking ecosystem, which operates on six supported blockchains — Unifi, Harmony, TRON, Ontology, IoTeX and ICON. It holds tremendous potential as more cryptocurrencies embrace PoS security mechanisms. 

Each Unifi node earns staking rewards in the form of the specific blockchain’s native token. You may stake UNFI on the Unifi protocol itself to earn UNFI. Additionally, you can stake TRX crypto on the Tron blockchain, ICX on ICON, ONE on Harmony, ONG on Ontology and IOTX on IoTeX.

DARBi

DARBi is another of Unifi’s unique products, a bespoke liquidity pool designed to maximize security for arbitrageurs while compounding the backed value of the UP token to ensure sustainable passive income for its users.

With DARBi liquidity pools, clients retain exclusive control over their arbitrage positions against public pools. This strategic exposure to crypto price fluctuations provides greater security for customers, ensuring they receive a predictable and reliable yield.

Source: Unifi’s Medium

INFINITI Token

Unifi Protocol’s hyperinflationary INFINITI token constantly increases with every transaction. This means your balance will always increase, even when you transfer out tokens, as new tokens will be minted and sent to your address after every transfer from your address. 

With an infinite supply of tokens, you can sell them at any time you wish — without regrets about selling them too soon if the price leaps after you’ve sold them. That’s because the more tokens you sell, the more you’ll receive to keep selling.

Unifi Protocol Crypto Tokens: UNFI and UP

While Unifi Protocol doesn’t have a native cryptocurrency, the two tokens associated with the project are UNFI and UP.

Unifi Protocol DAO (UNFI)

Unifi Protocol DAO (UNFI) is the Unifi ecosystem’s multi-chain governance token. UNFI plays a crucial role in Unifi’s token economy, and is listed on major cryptocurrency exchanges as a gateway to the protocol. It comes in two standards, ERC-20 and BEP-20, and is capped at 10 million tokens.

Holding UNFI on the following blockchains — Ethereum, BNB Chain, Polygon, Fantom, Avalanche or Harmony — gives you voting rights on core proposals regarding the protocols’ development.

UNFI tokens can also be staked to earn rewards with a high annual interest. There’s no limit to the number of UNFI tokens that can be staked, and the APR is set according to the total quantity of staked UNFI tokens. UNFI stakers receive vUNIFI, a non-transferrable ERC-20 token that can be redeemed anytime for the original UNFI, plus staking rewards.

With the launch of uTrade V2, UNFI holders will gain access to Super Pairs, which can be used to farm liquidity provider rewards, as well as a bonus from fees generated by UP minting.

What Is the UP Token?

UP is Unifi Protocol’s blockchain-specific liquidity mining token awarded to liquidity providers. It’s minted and backed by a base token (the native token of the supported blockchain) so that it may have a redeemable or backed value. UP is managed by a smart contract, which uses 5% of the trading fees earned from supported blockchains to mint it. As more and more trading fees are collected, the redeemable value will increase, which means when you convert it back to the base token, the token value rises — hence the name “UP.”

Previously, the 5% trading fee was the only way to increase UP’s redeemable value. However, following a referendum on Unifi DAO to upgrade to UP v2, five new ways were added to increase the token’s redeemable value: Direct public minting, staking rewards, liquidity pool rewards, arbitrage profits and the bonding UP process.

The redeemable value, however, differs across blockchains, and is named accordingly. For instance, the UP redeemable value on Ethereum blockchain is labeled as “UPeth.”

UP tokens can be redeemed into their base tokens at any time, but the longer you hold UP, the more native tokens will back it.

Unifi Protocol DAO Price Prediction

Since the end of 2022, Unifi Protocol DAO’s price has been in the $4–$8 range as the market stagnates, which suggests that UNFI will continue to trade sideways for the rest of 2023. Experts such as WalletInvestor predict that UNFI isn’t a good investment over the next year.

However, DigitalCoinPrice is particularly bullish on UNFI, expecting it to rise to $38.49 in 2025 and shoot up to $111.61 by 2030. Price Prediction also estimates a favorable increase for UNFI, albeit with more conservative growth, anticipating prices of $10.40 in 2025 and $68.50 in 2030.

Is Unifi Protocol DAO a Good Investment?

Unifi Protocol’s unique vision is to drive blockchain and DeFi adoption by creating a utility-rich network fueled by user participation Unifi is resolute in positioning itself as a DeFi project dedicated to the long-term vision of blockchain. 

The unique use of a single token to incentivize DeFi engagement across multiple blockchains undeniably makes Unifi Protocol appealing to blockchain enthusiasts looking forward to the widespread adoption of blockchain and DeFi.

Nevertheless, though Unifi may seem like a promising project, as an altcoin, it is prone to market volatility. Hence, it is vital to always do your own research before investing in this blockchain.

Where to Buy UNFI

You can buy or sell Unifi Protocol DAO on leading crypto trading platforms, such as Bybit. UNFI is available for derivatives trading on Bybit as a USDT Perpetual contract (UNFIUSDT).

Closing Thoughts

Unifi Protocol’s concept of creating a multi-chain governance token to incentivize DeFi participation across blockchains makes it an attractive platform for DeFi users. The ever-increasing value of UP, its utility token, which can be used across multiple chains, serves as an additional perk for Unifi’s users. 

Furthermore, Unifi’s unique DeFi products — such as uTrade V2, uBridge and DARBi — have proven the project’s value. However, only time will tell whether Unifi will help bring about the widespread adoption of blockchain through DeFi.

#Bybit #TheCryptoArk