Decentralized Finance has achieved an explosion of innovation since its relatively short lifespan. Considering the progress crypto has made since the inception of Bitcoin, DeFi is still in its infancy even in cryptocurrency years. That being the case, this “infant” has the ability to do things like create savings and money market accounts, yield farming, and hedge funds without even needing an email address or any KYC information. In addition to social trading projects like TokenSets, it's conservative to say that DeFi has already tackled 75% of normal, day to day practices from the traditional finance world (CeFi). It's reasonable to assume that the legacy finance days are numbered in the same way that email and internet changed the post offices and company operations.
However, it’s not to say that DeFi still has its limits or will diminish. If you could combine most of the current issues surrounding the future of DeFi with just one sentence, it would be this: There are too many moving parts to make a unified, future proof system in order to be efficient.
DeFi Is A Manifold System
Too many moving parts doesn’t mean it doesn’t work - on the contrary - DeFi does work and the most beautiful aspect of DeFi is that it's a functional, working ecosystem that was once thought impossible and breaks the chains of CeFi. Yet DeFi can be very clunky at times. If you want to change your assets around it can be very difficult depending on what you wish to do. There are limitations like withdrawal minimums, complex addresses, liquidity issues, and the like. Combined with variable gas fees and similar issues, DeFi becomes a little more complex.
This raises some concerns for the future. In the meantime, this creates a higher barrier of entry for those wanting to experience Defi according to its vision. Moving things around with high gas fees can be crippling for anyone just starting out or with a smaller portfolio, especially if you can lose money by sending to the wrong address. In the crypto world this also creates liquidity barriers - one opportunity to obtain more APY could be unavailable for certain reasons, governance tokens could be nothing more than a “members club” that degrades in value, or a lack of insurance on your digital assets.
This isn’t to say that DeFi is bad or going down the wrong path. Far from it. And that’s a large reason why Unn Finance, also known as the UNION Protocol Foundation, exists.
UNION Has a No Nonsense Solution
The UNION Protocol Foundation has a very explicit purpose behind its creation - a functional and effective bridge from CeFi to DeFi is needed to help run the DeFi ecosystem efficiently. Just like how Oracles are needed (like Chainlink) into order to translate normal data into blockchain data and provide “ramps”, bridges like UNION are needed in order to travel around the DeFi network that operates in its true vision. If DeFi is growing at a rapid pace then “transportation” within that space is needed to maintain its value.
UNION has four main pillars to achieve this goal of becoming a true solution:
Offering protection coverage on the different layers of the DeFi ecosystem. This includes things like insurance for Layer 1 solutions and risks from using smart contacts and heavy exposure of digital assets.
A true decentralized system that’s not a CeFi project in sheep’s clothing. There is no “membership” or catches to join the project in order to keep its benefits or KYC requirements.
A secondary market to reduce risk, free up capital, and allow for more efficient distribution for liquidity.
Governance token that’s not conditional for the project or used as vaporware
UNION takes advantage of some concepts like the Capital Model, which gives opportunity to lock in liquidity, which helps provide a stable system and thereby reducing risk. They also have UNN staking to help increase user benefits overtime. UNION has a UNN token model to help distinguish the benefits offered by the system:
UNN, which is the standard governance token issued to help vote on certain methods of operation,
uUNN, the token that manages the policy protection for the system to help ensure any risk involved, and;
pUNN, a token designed to protect the liquidity pools to offer solvency so the system runs at its most efficient
Keeping Decentralization in DeFi
These pillars are designed to help solve major concerns in the future for DeFi. Risk is a massive part of finance and although areas of finance like investing have responsibilities to those risks, other forms of finance like money markets should not have the risks that DeFi has at present. A popular CeFi insurance program called the Federal Deposit Insurance Corporation helps protect the financial system for banks. UNION could provide something equivalent in this regard (and others are doing this as well).
Decentralization plays a huge role as well. If even one price of the DeFi puzzle ends up being centralized and owns a critical portion of the ecosystem, then the idea behind DeFi is lost. Requiring things like KYC or “memberships” would tarnish the image of what decentralized money should be.
The public sale for UNN has now been announced over the past 24 hours so we just wanted to share some of the details so you can prepare yourself or look into the sale in some more detail. The starting date of the sale will be Sunday, November 22, 2020, and the starting price will be $0.035 and ending at $0.50.
Following the sale, UNN will launch the UNN Geyser, which will reward liquidity providers of UNN tokens to Uniswap with additional UNN tokens for their active participation. This has been done before with projects such as Ampleforth and it has been shown to have a good impact on price-performance previously and it is a great way for long-term investors and community members to get a reward for providing liquidity. UNN is a governance token with aspirations of being a staple DeFi token that is included in major DeFi platforms and protocols because of its deep liquidity.
There will be a fixed total of 1 billion UNN tokens. The UNN token forms the basis for the UNION governance ecosystem, driving the incentives for liquidity programs, yield farming, and protection coverage across the platform. The token distribution is as follows:
If you would like to participate in this sale or just get more information, then you can head over to https://purchase.unn.finance. More details to be announced.
UNION has quite a bit to offer for the future of DeFi that most users know that we need. Every ecosystem needs a means of transport - like highways, trains, airplanes, and so on. Without these systems in place, things would operate at a crawling speed despite projects still being up and running. UNION seeks to offer these fundamental solutions and does so without tying users to their system - perhaps like a toll fee - and instead lets DeFi run as it’s intended to run - by everyone.