Using Unicrypt to Build Investor Confidence in Your DeFi Project
The popular liquidity locking platform Unicrypt continues to gain momentum in the market. This growth can be attributed to a combination of factors ranging from the emergence of DeFi platforms to new functionalities such as yield farming protocols. Today, Unicrypt serves a vital role in building investor confidence.
Platforms such as Unicrypt offer consumer protections in the form of a liquidity locking mechanism. This system allows new projects entering the market to reduce "rug pulls" in the sector. Rug pull is a term used to describe a project that suddenly removes funds from its liquidity pool without warning. Whenever this occurs, investors lose their profits and, in many instances, their initial investment.
Sadly, these problems have hit a fevered pitch recently. The introduction of DeFi (decentralized finance) has led to a steady flow of new platforms entering the space. Each of these platforms introduces new earning mechanisms and promises higher ROIs than the next. Unfortunately, not all of these platforms are legit. The market has already seen its share of notable rug pulls to date.
DeFi Exit Scams Run Wild
DeFi's relatively new nature and technical aspects make it ideal for scamsters to prey on uninformed investors. A quick glimpse into the market reveals that DeFi is a scary place for those who cannot determine what projects are worthy of your investment.
In September, alarm bells rang after the China-based auditing firm, SlowMist, revealed a liquidity mining DeFi project based on EOS called Emerald Mine (EMD) had moved user tokens. Specifically, the report showed $2.5 million in "locked" crypto was transferred to private accounts. Sadly, this crypto was never really locked, and investors paid the price.
Another highly publicized rug pull occurred this month. The platform, DistX, left investors high and dry after the founder bailed the ship. Before he left the project, he made some withdrawals from the project liquidity pool. Shortly following these revelations, the project’s pool dropped from a $1.5M market cap to just over $15K. In essence, the project was worthless, and all investors lost big time.
Unicrypt to the Rescue
Unicrypt reduces these risks through the introduction of proprietary liquidity lockers. Think of these lockers’ kind-of-like mini time-locked safes. The developers agree to lock their liquidity in these smart contracts for an agreed time. In many instances, this time can be years. Since Unicrypt handles the smart contract, these projects have no way to remove this liquidity once applied.
In this way, Unicrypt builds a new level of confidence in the market. The added securities gained from these locking mechanisms are enough to provide investors with peace-of-mind. It also gives legitimate projects in the sector an avenue to proceed that’s not associated with the rug pulls occurring every week.
As you would expect, the prospect of easing investor concerns is a significant plus to developers. Consequently, Unicrypt has become the most used automated liquidity lockers in the market. There are already over 2500+ Unicrypt lockers in use today. These lockers hold approximately $52.43 Million locked liquidity at this time.
How Do I Use Unicrypt to Boost Confidence in My Project?
It’s easy to utilize Unicrypt to provide investors with more confidence in your project. The first thing to understand is that Unicrypt is designed to compliment Uniswap liquidity pool actions. Unicrypt rewards farmers for providing liquidity to Uniswap using UNCX and UNCL pairs.
All developers will need first to seed a market to launch a pool on Uniswap. Seeding a market requires that the paired tokens both be deposited in the liquidity pool. Once you launch a pool using Unicrypt's locking mechanisms, you or anyone else will not have access to these funds until completing the locking period. There are no exceptions to this rule. In this way, investors know that you can’t circumvent these protections.
Unicrypt Browser
The Unicrypt browser provides Uniswap users with some significant advantages in the market. For one, it shows what liquidity pools have their contracts locked. This way, users only invest in top-quality projects with long term success in mind. Also, this strategy ensures that developers who utilize Unicrypt receive a premier audience.
Multi-Token Strategy
Unicrypt relies on a multi-token approach to handle the network’s functions. The UNCX token is the utility token that powers new liquidity pools. New projects can decide between two different fee structures. If you are a larger project, there are options geared towards your requirements. You can pay 100 UNCX tokens +0.8% of the liquidity tokens locked.
Notably, these 100 UNCX tokens are burnt. This strategy creates a deflationary mechanism within the ecosystem. Deflationary protocols are critical because they allow developers to support the project token’s value.
Most projects will fall under the primary fee structure. That is a flat fee of 1 ETH + 1% of the liquidity tokens locked. This option allows liquidity pools for small and medium projects to take flight without high startup costs.
Yield Farming Tokens
The second token operating in the Unicrypt ecosystem is the UNCL token. Farmers receive their rewards in this token. Specifically, Unicrypt offers Yield farming-as-a-service Dapp. The platform supports the staking of the UNiv2 token via its yield farming protocols.
Yield farming is seen by many as a better alternative to trading cryptocurrency for many reasons. Primarily, yield farming requires little research compared to trading. Users simply lock their crypto in farming pools and receive rewards for their efforts. Best of all, your rewards get paid out block by block. Unicrypt has $790,000 total locked in farms currently.
Unicrypt to Expand
Unicrypt’s latest expansion is a step in the right direction. The team seeks to launch a fully automated token pre-sale protocol next year. Additionally, developers stated that they intend to expand their staking Dapp to support any ERC-20 token by Q1 2021.
