Proposal details
Project Name
UNION (UNN) Finance
Project Type
DeFi / Protection - porting dApp, integrating IoTeX
Proposal Description
UNION brings the IoTeX ecosystem Protection for Smart Contract Hacks, Exploits, and other DeFi Event Risks. UNION is a technology platform that combines bundled protection and a liquid secondary market with a multi-token model. DeFi participants manage their multi-layer risks across smart contracts and protocols in one scalable system. UNION decreases the entry barriers for retail users and lays the foundation for institutional investors. UNION’s full-stack DeFi protection is inclusive, composable, and brings battle-tested capital and pricing models from TradFi to the DeFi ecosystem. UNION’s full stack protection reduces the risks and costs of DeFi by providing tailored protection for composable risks. UNION provides a DeFi oriented protection product marketplace where risk can be freely traded between parties. UNION’s composable protection pools allow users (Liquidity Providers and Protection Buyers) to trade event risk in exchange for premiums and mining opportunities. Liquidity Providers earn cover premiums and shield mine. Protection Buyers obtain cover for a set period of time. UNION’s distinct governance model, bundled, full-stack protection, and open ecosystem (no KYC) allows users to obtain composable coverage that is not currently offered in the market. UNION is uniquely positioned by providing a marketplace for users to “trade risk”. UNION will deploy four protection products to the IoTeX ecosystem: U-CDS, C-OP, Bridge Protection and Pebble Protection.
UNION’s Smart Contract Protection (U-CDS)
UNION will provide the composable pool architecture for smart contract protection to the IoTeX ecosystem. UNION’s Crypto Default Swap (U-CDS) protects purchasers against event risk such as smart contract exploits, oracle manipulations, and rug pulls. U-CDS implements a model where the buyer premium is paid 100% upfront. If an event is triggered, payout is always 100% of cover bought.
All pool liquidity is on chain and every dollar of provided protection is backed by a dollar in UNION’s protection pool. Pool liquidity and governance are intentionally separated, preventing the perceived conflicts that plague other protection projects. Claims are voted on by holders of the Union Protocol Governance Token (UNN Token), and not by pool Liquidity providers. Kleros provides final adjudicator when outcomes are challenged.
UNION’s Collateral Optimization Protection (C-OP) UNION’s C-OP is a Defi derivative primitive that can be used as a standalone put option to either hedge risk or short assets. When integrated with a lending platform, C-OP allows a borrower the ability to increase collateral factors to 100%. When C-OP is deployed, the user reduces risk in portfolios and enhances capital liquidity in the form of lowering margin requirements. C-OP operates as a contract-by-request (CBR) pool where Protection Buyers are buyers of puts and Liquidity Providers are sellers of puts. The pool is a constant put writer. Even if the underlying collateral is a volatile asset like WBTC or ETH, buyers and sellers pay and receive premiums in Stablecoins. UNION now also provides policies that can by denominated in WETH or WBTC. Pool premiums are paid by Protection Buyers and are split amongst Liquidity Providers, the Pool Reserve, and the Foundation Reserve. As long as the pool’s liquidity does not fall below the pool’s minimum capital ratio, liquidity Providers accrue yield and can withdraw their liquidity at any point.
UNION’s Bridge Protection
Cross-chain bridges are rapidly emerging as critical infrastructure for a scalable and interoperable ecosystem of public blockchains. As the volume and value of transactions deployed across bridges increase, asset protection plays a pivotal role. It ensures that the funds invested by DeFi participants are adequately protected in the event of cross-chain bridge problems. Cross-chain asset coverage is a nascent space but one that will soon absorb a significant portion of DeFi’s demand for protection pools and other instruments as interoperability expands. UNION provides the composable pool architecture for asset protection for balances and NFTs that move over IoTeX’s ioTube bidirectional bridge. Utilizing UNION’s U-CDS structure, Liquidity Providers and Bridge Travelers trade event risk in exchange for premiums and mining opportunities. Liquidity Providers earn cover premiums and shield mine. Bridge Travelers obtain cover for their Bridged Asset(s).
UNION’s Pebble Protection
The IoTeX Pebble is a groundbreaking cyber-physical device that allows users to take back control of their data integrity and privacy. Pebble’s real-time tracking and end-to-end efficiency makes it extremely attractive to both enterprise and individual users.
UNION will provide the composable pool architecture for Pebble parametric protection in the IoTeX ecosystem. Specifically, UNION will utilize zkSNARKs or, alternatively, IoTeX chain data to serve as the parameter for claim triggering in parametric policies – triggering events for a protection claim can be based upon any number of predetermined factors, including temperature, location, or barometric pressure. Liquidity Providers and Pebble Users can trade event risk in exchange for premiums and mining opportunities. Liquidity Providers earn cover premiums and shield mine. Pebble Users obtain cover for a parametric risk. A simple example is a protection policy on a supply chain shipment that must remain frozen. In the event the temperate of the shipment the Pebble is monitoring breaches a certain threshold, the protection policy is triggered.
Milestones
- Milestone 1: UNION is officially deployed to the IoTeX mainnet
- Duration (weeks): 2-3 weeks
- Deliverables (make sure they can be easily verified): hardening servers and nodes, Mainnet deployment and validation of test and production frontend for C-OP and U-CDS
- Funds request (USD): 20,000 USD
- Milestone 2: U-CDS products on Mainnet integration with Pebble in POC environment
- Duration: 5 - 8 weeks
- Deliverables: U-CDS product on Mainnet /contract integrations with the Pebble device for limited scope Proof Of Concept. Demonstration, findings, and next steps proposal for build to general availability
- Funds request: $30,000 USD
Total funds requested
$50,000 USD
About your Team
Michael Beck is UNION’s Project Lead. Michael has over 20 years of experience in health care, finance, and wealth management. In addition to having served as an AVP at a prominent capital management company where he performed software architecture and development related functions for a hedge fund with $15BN+ AUM, he holds five patents in areas related to decentralized cryptography with respect to management of data rights and entitlements. Union’s Advisors are listed on the Union Website (https://www.unn.finance/) and are all leaders in their respective fields.
Union has 10-15 developers.
Metrics
Benefits to the IoTeX Community:
- Every IoTeX Community member who obtains protection / cover gains peace of mind from operational risks with capital impacts.
- The IoTeX Community gains the ability to protect their virtual assets.
- IoTeX projects offering UNION protection obtain the ability to attract institutional capital that requires a hedge in order to access DeFi.
- The IoTeX Community maintains its stellar reputation for security and safety.
- The IoTeX Community gains an additional layer of public accountability.
- IoTeX Community traders gain the ability to arbitrage pricing disparities based upon examined risk.
- IoTeX further distinguishes itself from other chains.
- C-OP allows the IoTeX Community the ability to deploy a standalone put option to either hedge risk or establish a short position. IoTeX Community members can express pair trades by purchasing C-OP in one asset while providing liquidity in another.
Links
• Certik Audit (UNN, December 2020);
• CyberUnit Audit (C-OP, March 2021);
• Sanctum Security Audit (C-OP, April 2021);
• CyberUnit Audit (U-CDS, May 2021);
• Sanctum Security Audit (U-CDS, July 2021); and
• Union also maintains an open bug bounty program with Immunefi (since April 2021).
• Github: UNIONProtocolFoundation · GitHub
• Gitbook: Purchase C-OP - Union Protocol
• Website: https://www.unn.finance/
• Medium: https://unn-finance-main.medium.com/
• Twitter: https://twitter.com/unnfinance
• Telegram: Telegram: Contact @UNNFinance
• Telegram ANN: Telegram: Contact @UNNFinanceANN
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