UniDex May Monthly Wrap-Up
We’ve come so far after our initial launch on 3/31. So far, we’ve processed a total of 183,100,000 million FTM and 104,200,000 million USDC volume. It’s quite fun to look back at our original milestone of passing a million in daily volume. Now, we processed 2–3 million daily on average, with some days hitting the upper 4 million mark.
We want to cover a lot of important information here in this monthly report, so make sure you read this month’s wrap-up as it’ll provide some critical milestones for the upcoming monthly wrap-up. However, we’ll briefly start with some key stats that sum up the protocol and our token.
UniDex P/S Ratio: 2.07x
UniDex P/E Ratio: 3.04x
This is interesting because if ranked on token terminal against other protocols, this would make UniDex the 6th best for P/S & the 2nd best for P/E protocols in DeFi.
Despite the market downtrend, we’ve held firm and pushed updates left and right. Our P/S & P/E ratios are much more fairly valued than most DeFi protocols such as being priced similarly to Synthetix Protocol, the UNIDX token would be valued at $34 with our current volume. However, let’s talk about those upcoming things we & the community have been building without wasting more time.
Table of Contents
1. Structured Products
2. New trading mechanisms for market making
3. UI update for Poolers
4. New Incentives
One of our most anticipated products built on top of UniDex is already underway!
For those unfamiliar with structured products, they’re usually defined in DeFi as investment strategies that are often packaged together to provide easy access to these strategies. For example, a popular protocol offering structured products is Ribbon Finance. This protocol allows users to deposit funds into a vault that will automatically exercise strategies for options trading without needing the user to manage and do these strategies themselves actively. Simply deposit, and the vault will automatically commit to strategies like selling puts.
While the final number may change, four users have approached us to take up the offer of building these structured product vaults/projects made around UniDex’s leverage pools after discussion in our public discord channel. Better buckle up since some serious alpha is dropping for those reading!
Leverage pool structured products can look like depositing into vaults that offer certain protections and automated strategies that you typically have to monitor. The few ideas discussed include protection vaults and volatility vaults for yield hunters.
Protection vaults can manage liquidity when the risk ( open interest ) on one side leans too high. For example, if the current open interest leans too heavily into shorts, the ratio of shorts to longs is 5:1. This vault can automatically pull liquidity and deposit to another yield generating product or even hedge a trade until the long-to-sort ratio decreases. This would allow users to be deposited in the leverage pool but not risk being inside the pool with potential high trader earnings.
Another discussed vault would be volatility vaults in which if the bitcoin volatility index registers above a particular value, then have this vault sit out of the pool. This mechanism would allow a safe game to be played for poolers to collect fee revenue and not rely on trader PnL for potential downside while missing out on potential trader losses.
There’s been a couple more strategies discussed and 3 more interesting ones that we’ll see hopefully brought forth publicly as community contributors near its completion.
These additions to UniDex can be compared to the relationship between Opyn and Ribbon finance. The liquidity available to traders and the protocol have massively gone up ever since Ribbon finance first introduced these vaults, and we expect the same to follow here. Another interesting thing to note is that devs can build entire projects by making vaults on top of our leverage pools, such as autocompounders or structured product vaults. If these projects decide to launch a token or something similar, we’ll offer grants and assist with bribes ( assuming a token is established to support their project on Beethoven or Spirit ). We’ll talk a little more about these grant programs below, but that’s all we want to share in this medium article. The content on this discussion can go on extensively, and we want builders to talk with us on our social channels like discord or telegram, so don’t be afraid to reach out!
New trading mechanisms for market making
To increase the sustainability of liquidity providers, we want to introduce a few mechanisms to improve market-making finally. A few of these concepts are new to the market, while others have already existed.
- Dynamic spread
- Aggregated dynamic funding rates
- Dynamic slippage
Let’s go over all these starting with number one…
Many trading platforms already include a small spread like ours to prevent things like market manipulation. One problem that other platforms have yet to address is making these proactive to market conditions. Usually, increasing the spread of a trading pair occurs much later after people have already seemingly gamed the market or unsafe conditions for poolers. We can use scenarios on our platforms, such as many traders shorting the FTM/USDC pair using the USDC pool or others like GMX & GNS.
Spreads on competing platforms usually range from 0.05–0.2% of technical “price impact” ( no real price change occurs. Rather, the bid/ask price you’re filled at is intentionally higher to favor poolers / reduce the ability to move markets in your favor ). However, dynamic spreads are one feature we will be rolling out that has already been on the testnet for quite some time.
Essentially we will aggregate the long to short ratios & spreads across different exchanges that we already pull pricing from and our platform and assign weight to them. These values will determine a factor to increase & decrease the spread for bids and asks points. In turn, adjusting the entry price traders going long and short will execute. Specific trading pairs such as BTC, ETH, and pairs like GOLD won’t feel any effect, given it’s already challenging for a small group to manipulate the price of these highly liquid order books across multiple exchanges. However, specific pairs like AVAX may be easier to manipulate or have periods of thin orderbooks. When a pair’s price rises, you would want to enter a trade on a platform that doesn’t punish you for taking the minority position just as severely as taking the majority position. That’s exactly what this update aims to solve while giving more protections to coordinated price movements (such as targeting the liquidation of a trader making for an apparent short play).
Aggregated dynamic funding rates
Like the spread update, our new dynamic funding rates will help offer protection during prolonged market movements. Currently, interest sites at a fixed -16% paid on closure based on the size of the position ( after leverage ). We could use the projected funding rate based on our platform, but this doesn’t exactly paint a more accurate picture of market conditions. Our mechanism will aggregate the funding rate across multiple platforms offering perpetual contracts. This gives a more precise view of the global long to short ratio for a trading pair, giving traders a more fair trading experience and safeguards for poolers. We currently want this funding rate to update every 4 hours while the upper and lower bounds to range from 3% to 80% when the global L/S ratio is heavily skewed in one direction.’
We’re introducing slippage when users want to place larger orders that tie into our spread update. No slippage orders are great on paper until you want to list more “risky” assets such as FTM, BOBA, or similar high volatility coins. Usually, you’d experience price impact when building into a position or sending large orders, but many perpetual trading protocols market no slippage as a feature. Some platforms will have PVP mechanisms that punish large trades through funding rates or Gaussian liquidity curves. We wanted to keep it simple and allow for larger orders that will experience price impact against the spot price based on the liquidity available in the pool. Traders that trade in more significant amounts can now enter more sizable positions, giving the pool a more significant edge for these larger positions.
UI update for Poolers
We want to increase the information provided for pooling and clarity around it. We want to give the pools page a make-over focused on pool data and transparency. One way we’re doing that is making this more horizontal and expansive. Poolers can quickly claim and redeposit, while users that want a more extensive breakdown can expand each section to see aggregated data related to each section.
For example, someone can immediately see the current essential information like TVL, APY, and utilization. For more info, they can expand the pool through a drop-down and see charts related to each section like APY overtime, TVL over time, Trader PnL/Fees over time, etc. This also gives us more room to clarify what pooling is and how it ties into the protocol. There isn’t too much room for effective educational boxes or tool tips that can reduce confusion about what they just deposited into. Our time spent here will allow for more clarity and clean access to managing your liquidity in the pools.
While we did make this a dedicated section for this medium article there isn’t much to share so just be on the lookout for upcoming teasers!
We are always looking for ways in which the community members can contribute to the UniDex project, not just in the marketing department. We want to help incentivize projects to build on top of UniDex through grants and similar means to boost the adoption of UniDex.
A few ways we’ll do this is to start with a basic grant program for builders to make things like external dashboards, products like pool vaults & auto compounders, and Twitter bots. Simply pitch your idea, the team & community will judge the impact, and we’ll help you get started on your journey if it’s something we want to see! Our likely first contenders will be the devs wanting to build these structured product vaults, so we cant wait to see these built out and pitched to us. While similarly, if these products turn into projects & DAOs. We can help incentivize tokens ( if launched ) with things like bribes instead of grants.
This wraps things up that we wanted to share now, but we still have more upcoming. For example, we will shortly add a few more aggregators to spot trading, heavily polish the landing page with beautiful animations, and revise the docs for a more up-to-date archive of information. We thank everyone again for being on us through this journey, and we’ll get back to building now!
UniDex Quick Links
Discord permanent invite link — https://discord.gg/unidex
Twitter — https://twitter.com/UniDexFinance
Telegram group — https://t.me/unidexfinance
Telegram ann channel — https://t.me/unidexapp
Leverage Terminal — https://www.leverage.unidex.exchange/
Business inquiries — firstname.lastname@example.org