UniDex has released V4, introducing significant upgrades to the protocol. This update brings three major features that enhance the DeFi experience for traders and liquidity providers.
Rehypothecated Yield: Maximizing Returns on Idle Assets
UniDex V4 introduces Rehypothecated Yield, a system designed to optimize returns on idle liquidity and user deposits. This feature leverages yield-bearing assets to generate additional revenue streams for both the protocol and its liquidity providers.
The Rehypothecated Yield process begins when users deposit assets into UniDex V4. The protocol then uses these assets to generate yield from multiple sources, including sUSDe, Aave USDC, and GMX GM tokens. The generated yield is continuously swept into USDC for the vault, creating a cycle of ongoing yield while trading activity is low. UniDex manages this process automatically, allowing users to benefit from enhanced returns without the need for active management.
How Rehypothecated Yield works:
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Users deposit assets into UniDex V4.
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The protocol uses these assets to generate yield from multiple sources, including sUSDe, Aave USDC, and GMX GM tokens.
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Generated yield is reinvested to compound returns.
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The value of these assets increase over time increasing the share price of USD.m
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Assets can be redeemed back to a normal stablecoin such as USDC at any time.
UniDex manages the yield optimization process automatically, allowing users to benefit from enhanced returns without active management.
See this example from GMX's GLP market-making pool. A large portion of the pool goes underutilized during periods of low market activity for traders. However, lending protocols and other DEXs may be seeing activity, and all this idle capital isn't tapping into that potential. This is where rehypothecated yield shows its strength, allowing idle capital not being utilized by traders to gain interest.
During periods when other Perp DEXs may be seeing more activity than our own due to grants and other external factors, market-making pool tokens such as GM tokens from GMX can also be utilized. This approach allows our vault to gain exposure to that perp's market-making gains. Any grants and incentives they may also be running can be captured through this approach, providing even more gain for our market-making vault.
USD.m: A New Token for Liquidity Providers
USD.m is a new LP receipt token designed to revolutionize the liquidity provision experience on UniDex. In previous versions of UniDex, liquidity provision was limited to a simple deposit vault system. With the introduction of USD.m in V4, the landscape for liquidity providers has dramatically changed.
The USD.m token represents a user's share in the liquidity pool, but it goes far beyond a mere representation of deposits. Its value dynamically adjusts based on the protocol's performance, automatically incorporating trading fees without the need for manual claiming. This means that as the protocol generates fees and performs well, the value of USD.m increases, directly benefiting token holders.
What truly sets USD.m apart is its enhanced interoperability with external protocols. Unlike the closed system of previous versions, USD.m can be freely traded on popular DEXs like Uniswap and Camelot. This opens up a world of possibilities for liquidity providers. They can now use their USD.m tokens in yield farms on other DEXs, potentially leveraging their deposits up to 10x through future partnerships.
This increased interoperability not only provides more options for liquidity providers but also has the potential to attract more liquidity to the UniDex ecosystem. As USD.m becomes integrated into various DeFi protocols, it creates a network effect that can drive further adoption and liquidity depth for UniDex.
Key features of USD.m:
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Dynamic valuation based on protocol performance
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Automatic incorporation of trading fees into token value
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Gains yield from external markets
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Gains value from partnered market making LPs
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Minting available using various assets (USDC, DAI, etc.)
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Tradable on DEXs like Uniswap and Camelot
Cross-Chain Support: Unified Trading Across Networks
UniDex V4's cross-chain support system represents a significant leap forward in making DEX trading more accessible and efficient across different networks. This feature addresses one of the major pain points in the DeFi space: the fragmentation of liquidity across various chains.
With V4, users can now fund their margin wallet to start trading from most EVM-compatible networks, including Optimism, Base, and Ethereum mainnet. This means that regardless of where a user's funds are located, they can easily participate in trading on UniDex without the need for manual bridging or complex multi-step processes.
The process is straightforward: users can deposit any supported token from a compatible chain into their UniDex margin wallet. The protocol then handles all the necessary behind-the-scenes operations, including token swaps and cross-chain transfers. This seamless integration allows traders to tap into liquidity from multiple chains, potentially leading to better pricing and reduced slippage.
Misc Updates
Funding Rates: UniDex V4 introduces a dynamic funding rate model to balance markets more effectively. This system allows for bidirectional payments between long and short positions, depending on market conditions. The implementation of this feature ensures that market imbalances are automatically corrected, promoting more stable and efficient trading environments which should increase LP profitability and stability, while encouraging funding rate arbitrage volume.
Stop-Loss and Take-Profits: Traders can now set stop-loss and take-profit values simultaneously with order creation. This streamlined approach to risk management allows users to define their exit strategies upfront, reducing the need for constant monitoring.
Multiple Order Support: The protocol now supports the creation of multiple orders and positions of the same type. Users can, for instance, submit separate BTC-USD long trades with different entry prices.
Self-Execution Capability: Perhaps the most significant update is the ability for users to self-execute orders against on-chain oracles if keepers go offline. This feature greatly enhances the protocol's decentralization and reduces reliance on continuous team infrastructure. By allowing traders to interact directly with on-chain price feeds, UniDex V4 ensures that trading can continue uninterrupted even in the face of technical issues, thereby increasing the robustness and reliability of the entire system.Faster Executions: With a complete rewrite to the oracle logic, trades can settle instantly against the Molten Network oracle price, or up to 5 seconds at maximum for long-tail asset feeds. These orders are also batch settled allowing for hundreds of trades, limit orders, liquidations, and more to all be settled within the same transaction.
Getting Started with UniDex V4
UniDex V4 is now live and available for use. Users can explore the new features, including enhanced yield generation through rehypothecation, expanded liquidity provision options with USD.m, and seamless cross-chain trading capabilities.
UniDex Quick Links
Discord invite link — https://discord.gg
Twitter — https://twitter.com/UniDexFinance
Website -https://www.unidex.exchange/
Swap Trading — https://app.unidex.exchange/
Leverage Aggregation Terminal — https://leverage.unidex.exchange/
Business Inquiries — marketing@unidex.finance