Unit Protocol
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CORE CONCEPTS
Understanding DUCK
TECHNICAL REFERENCE
Governance
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The best of frequently quacked questions and answers from the Unit Protocol community
What is Unit Protocol?
What’s the difference between Unit Protocol and other borrowing protocols?
In some sense, all alike protocols allow people to access liquidity in return for collateral. Some are conservative. Others are like a money market and depend on the liquidity people provide.
Unit Protocol focuses on two things:
1) making the list of tokens you can use as collateral as long as possible;
2) better risk control and borrowing protocols.
The liquidity provider token market is a big deal and there are many very interesting use cases that potentially can boost user's APY with a relatively low increase in risk.
Is Unit Protocol like AAVE or Maker DAO, but for LP tokens? We can borrow stablecoins by providing LP tokens as collateral, right?
It’s closer to Maker than AAVE. At Unit Protocol, you can use your tokens to mint the stablecoin USDP. AAVE is more like a bank when they accept deposits and give loans secured by assets.
Where can I read more?
🍞 Stability & Liquidation fees 🍞
I don't get how stability fees work. I get that a 10% stability fee is the annual rate, but what about borrowing for 1 month?
Your annual rate is 10%. To work out the monthly rate, divide that 10 % by 12 – so, less than 1%.
What happens when I get liquidated?
Every position which has a health factor of <1 can be liquidated. If the bot is triggered and someone buys out your position and pays off your debt, the remaining part is returned to your account – minus the liquidation fee.
Can you explain the liquidation ratio to me?
If your debt/collateral ratio goes above a certain level, your position could be liquidated to get back the debt. The remaining part minus the liquidation fee will be returned to your address.
How do you know if your CDP has been liquidated?
You will not have a position in the system after you visit the dApp + the liquidator will send the remaining collateral to the CDP owner’s address.
Let's say as a USDP borrower, I have 10 ETH collateral and a liquidation is triggered. Since the liquidation fee is 10%, the borrower has to pay 1 ETH of the liquidation fee? If this is correct, what are the other steps after that?
The borrower will pay 10% of the gathered USDP for his collateral. It could be less because they borrowed less than their collateral.
My WBTC position got liquidated. Where does the remaining amount go? It hasn't gone back to my wallet yet.
You borrowed USDP, and you still have that USDP now. However, your position was liquidated and now WBTC belongs to another user who bought it out.
Keep a close eye on your position, sir.
⛳ Staking ⛳
So, what is veDUCK?
Do we have to unstake from V1 and stake on V2?
V1 is no longer active. As of now, 100% of fees collected will go to V2 stakers. There will be no more rewards for V1 stakers, so there’s really no point in keeping your stake there.
What do I get for staking my DUCK?
When you stake your DUCK, you can choose the amount of time you want to lock it in for. When your lock ends, you get back your initial stake – and any extra you haven't claimed on top. All rewards are paid out in USDP.
In V2, USDP rewards are distributed to all veDUCK holders, proportional to their balance.
The longer you lock, the higher your veDUCK balance. So...
100 DUCKs locked in for the maximum of 4 years = 100 veDUCK
100 DUCKs locked for 2 years = 50 veDUCK
If you lock up 100 DUCK for 4 years, your initial balance will be 100 veDUCK. After 1 year (3 years before the lock expires), your balance would be 75 veDUCK.
To boost your rewards, you need to check your veDUCK balance and extend your locks from time to time.
So far, Unit Protocol has collected almost 8 mn USDP in fees. You can see the stats on fees by visiting the community-run quackprofits.xyz.
Remember:
– You can't unlock a lock. Be careful when choosing how long you want to lock your DUCK in for.
– During a lock, you can claim your rewards when fees are distributed by hitting CLAIM.
Are you going to continue to support DUCK or are you focusing on the governance token now?
Yes, we will continue to support DUCK.
Is there a deadline on when we need to stake it for 2 years in order to get Fantom governance token?
The first USDP distribution (Staking V2) will be on Wednesday 27th October, and then once a week after that.
Do we get more Fantom governance tokens if we lock for 4 years, rather than 2 years?
Yes. The amount of governance tokens you receive depends on the locking period and amount of veDUCK.
How can I work out the APY?
The APR will be calculated after the first distribution. There will also be a calculator added soon.
What happens to the old DUCK token that we are holding? Do we need to convert to FTM?
There’s no change to DUCK.
What's the difference between V1 versus V2 staking?
In V1, you could stake and unstake at any time.
In V2, you choose how long you want to lock in your DUCK.
In terms of rewards, is there any benefit to staking longer, i.e higher return.. or is it proportional?
In V2, USDP rewards are distributed to all veDUCK holders, proportional to their balance.
The longer you lock, the higher your veDUCK balance.
100 DUCKs locked in for the maximum of 4 years = 100 veDUCK
100 DUCKs locked for 2 years = 50 veDUCK
If you locked up 100 DUCK for 4 years, your initial balance would be 100 veDUCK. After 1 year (3 years before the lock expires), your balance would be 75 veDUCK.
So, to boost your rewards, you need to check your veDUCK balance and extend your locks from time to time.
Why did you change the staking model?
Locking DUCK in for a fixed period of time, rather than staking/unstaking it whenever you like, means that the tokenomics are more predictable and, in turn, the protocol is more stable.
What fees are these DUCKs feeding on, exactly?
There are two types of fee collected from people who use Unit Protocol – the stability fee and the liquidation fee. Both of these fees go straight into Unit Protocol’s DUCK pond.
Does VE duck denominate the amount of USDP received at the end of the lockup period?
Yes, it affects It the amount of USDP you get, but not the denomination.
Does veDUCK continue to earn rewards after the lockup period, if you don't restake?
No, you have to either:
- restake to keep receiving rewards after the lock ends;
- increase the locking period.
% Interest rates %
Is there an interest rate the longer you hold a position and a deadline to pay back?
The stability fee is the ‘interest rate’ per year. There’s no time limit on paying it back.
Where can I see the interest rate for borrowing USDP?
Your interest rate = stability fee in the interface (same as maker). It’s the cost of borrowing per year in %. The actual % is the cost of debt per year. If you borrow 100 USDP and the stability fee is 2% then in one year you will have to return 102 USDP.
Where can I find my interest rate for borrowing?
1. If you are about to open a debt position within Unit protocol:
Connect wallet > With balance > Open any preffered collateral from selection > On the top of the collateral page you will see the section 'Collateral parameters' and here you go!
2. If you already have an open debt position with Unit protocol:
Connect wallet > Open your collateralised position (your collateral page) > Navigate to 'Your CDP' section on the collateral page and you will see what you are looking for.
👩⚖️ Governance 👩⚖️
How does the team decide on the stability rate and liquidation ratios?
The liquidation fee is the percentage of a loan that the borrower must pay if liquidation occurs. This fee is added to the vaults of total outstanding generated USDP, which will be deducted from collateral if liquidation occurs. The liquidation fee is then sent to the treasury pool and distributed between DUCK stakers.
The stability fee, on the other hand, acts as a risk parameter. It tells you the inherent risk in creating USDP using different collaterals.
Can you share who conducts your audits?
Unit Protocol has been audited by:
🚀 Future 🚀
Can I see a roadmap?
The problem with roadmaps is that there are so many things we can't estimate timing on. That’s why we follow one simple credo – deliver.
When moon? 😂
Soon, my moon-hungry friend. Soon.
One thing you can be sure of – the future is webbed.
💧 Liquidity💧
What's the circulating & total supply?
Ok what's the market cap now guys?
What’s the Total Value Locked for Unit Protocol?
📈 Tokenomics 📈
Hey guys what’s the difference between Unit Protocol and Maker DAO apart from flexibility on collateral types and ratios?
Unit Protocol is different in many respects, including architecture and tokenomics, stable interest rates, broad collateral types (including LP tokens) etc.
Our killer use case is that we let you mint USDP from collaterals and LP tokens – something which was not available before with a stable stability fee. 🙂
I've read the whitepaper and from my understanding the main difference between Unit Protocol and other CDP platforms is that you can use LPs as collateral?
Well, yes. Unit Protocol allows you to use LP tokens. But there’s also a fixed interest rate, advanced tokenomics, the ability to quickly add new tokens, and so on.
How does Unit Protocol handle seismic short-term price changes? Are there special protection mechanisms in place?
The mechanism of the Dutch auction has proven effective. Collaterals subject to liquidation are bought quickly. After a CDP is triggered for liquidation, a Dutch auction starts for the underlying collateral with a linear decrease in price. (the price decremental step can be different for various assets, but in the majority of cases it’s a ~0.09% decrease per block). In the future, we would like to set this parameter based on market volatility automatically.
If there were a flash crash which triggered a Dutch auction, only for the price to recover quickly (e.g ETH drops to $800 for 1 minute, before recovering to $2000), what would happen? We saw something like this in March 2020 when BTC dropped 50% to below $5000.
The current version of Unit Protocol incorporates a discount mechanism relative to the market price of the asset to be liquidated. This has not yet been applied. This parameter can also be set on the basis of market volatility. This option can be enabled only after the announcement and cannot be applied to collaterals under liquidation.
👨🌾 Farming 👨🌾
Are there any opportunities for yield farming with Unit Protocol?
Yes!
Curve.fi
Component
👷 Architecture 👷
Which Oracle do you use?
We use Chainlink to determine the dollar price of ETH and own on-chain oracle to quote tokens from Uniswap, as well as Uniswap LP tokens. Our oracle uses the Keydonix library with some modifications.
How often do your oracles update?
Where can I see your audits?
I think I’ve found a bug! What now?
Oh, well done you. Please send it to [email protected] along with a clear description.
Team
How many people are on the Unit Protocol team?
About 10.
Where can I find information about the team?
Is this a side project or a full-time effort ?
It’s an unending obsession.
Where are you based?
We’re decentralised, naturally. 🙂
Suggestions for Unit Protocol
If you have a fantastic idea which you would like us to consider, please post it in our #ideas-proposals room on Discord.
Working with Unit Protocol
If you’re interested in working with us, please write to [email protected]
Listing with Unit Protocol
If you’re interested in listing a token with us, please write to [email protected]
Interview requests for Unit Protocol
Want us to speak at an event, do an interview/AMA, or join you for some cartwheels in meadows of wildflowers? Write to us at [email protected]
This selection of FQQs is from our community. Join us at:
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Contents
What is Unit Protocol?
🍞 Stability & Liquidation fees 🍞
⛳ Staking ⛳
% Interest rates %
👩⚖️ Governance 👩⚖️
🚀 Future 🚀
💧 Liquidity💧
📈 Tokenomics 📈
👨🌾 Farming 👨🌾
👷 Architecture 👷
Team
Suggestions for Unit Protocol
Working with Unit Protocol
Listing with Unit Protocol
Interview requests for Unit Protocol
This selection of FQQs is from our community. Join us at: