At AU21 Capital, we are delighted to announce our recent investment in UniLend, a decentralized and permission-less protocol that simultaneously enables issuance, lending, borrowing, trading, governance and a variety of other services for all tokens operating on the ERC20 standard. This partnership is a manifestation of our desire to widen the scope of interactivity between digital assets, increasing locked value and yielding further growth in the DeFi space.
Inhibiting Factors to Decentralized Finance Growth
Though the DeFi space has seen a tremendous increase in Total Value Locked within the past year, there remain two distinct attributes in the sector that are restricting greater rates of expansion.
- Few existing DeFi platforms support all of the assets within a framework, such as ERC20. While this benefits the dozen-or-so tokens that have achieved mainstream adoption, it effectively bars investors from accessing the billions of dollars locked in other currencies. By withholding financial service provision to only a select number of tokens, existing platforms cast a shadow on opportunities that may in fact have better suitability for investors and could create increased value within the entire DeFi ecosystem. This segmentation also creates phantom market risk for investors, who unknowingly invest in a small and highly corollary basket of assets.
- Of the few platforms that do support a wide gamut of tokens, investors are given few liberties with their assets. No existing platform effectively offers both the ability to exchange assets and engage in lending activity, resulting in heavy cross-platform dependence and causing investors to resort to using inefficient P2P protocols.
UniLend — Unlocking DeFi’s Hidden Potential
UniLend serves to merge the strengths of current DeFi platforms for all assets built on the ERC20 Platform. UniLend’s Decentralized Protocol establishes two discrete environments for digital asset transactions, one which mirrors existing DeFi money markets while the other serves as an exchange. Permissionless lending and customizable loan collateralization agreements allow for users, instead of platforms, to decide which assets may participate in one or both asset pools. Additionally, by hosting all of these capabilities within one decentralized protocol, UniLend will virtually eliminate friction when investors engage in economic events that would have previously been multi-platform affairs.
We are eager to work alongside UniLend in their mission to create a more robust and efficient market by enabling every token to partake in the growth of DeFi.