UNION will introduce collateral optimization instruments and bundled insurance coverage while improving DeFi composability via the Avalanche-Ethereum Bridge.
UNION is bringing cross-chain decentralized finance (DeFi) protection to Avalanche users by deploying collateral optimization (C-OP) instruments and bundled insurance coverage for DeFi applications on Avalanche. UNION will leverage the Avalanche-Ethereum Bridge (AEB) to seamlessly transfer protection tokens between Avalanche and Ethereum.
UNION is beginning the integration immediately and plans to extensively test its products on Avalanche’s testnet. Upon completion of sufficient testing, UNION anticipates launching on Avalanche mainnet in Q2 2021.
UNION joins prominent DeFi projects like YIELD, bZx, and Reef Finance in expanding their applications to join Avalanche’s rapidly growing ecosystem.
“Avalanche’s breadth in Defi participants and solutions provides a rich tapestry for any project to grow with. They are building a “bundled”, interoperable Defi platform that pairs perfectly with UNION’s bundled protection offering for their users. Near-term, we are excited to unlock capital efficiency for their growing network of lenders with C-OP,” said John Liu, CPO of UNION.
Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem. Avalanche is the first smart contracts platform that processes 4,500+ transactions/second and confirms transactions in under one second. Ethereum developers can quickly build on Avalanche as Solidity works out-of-the-box.
Increasing Capital Efficiency of Decentralized Lending Platforms
Today’s decentralized lending platforms require high-over collateralization ratios for crypto-asset collaterals (typically ranging from 125% to 150%).
UNION will configure the C-OP product to increase the capital efficiency of decentralized lending platforms on Avalanche by lowering collateral requirements using an American option-style primitive. Not only does this improve capital efficiency but also enables:
- Adding to the borrowing capacity during positive price movements
- Increasing account resilience to liquidations
- Reducing the opportunity and actual cost of liquidation
C-OP provides more borrowing power and lower liquidation triggers — a beneficial outcome for risk-takers who want to borrow more or for conservative borrowers who want more protection.
Adding More, Composable Protection for the DeFi Users
UNION’s bundled insurance, a product providing protection across a multitude of variables, will also be integrated with Avalanche. Bundled insurance is in high demand across DeFi primarily due to the multitude of risks facing financial engineering on permissionless networks, including smart contract hacks, bugs, network vulnerabilities, oracle exploits (e.g., flash loan arbitrage attacks), or event risks like exit scams.
Applicable use cases include borrowing/lending, AMM impermanent loss protection, yield farming, gas hedging, and protecting assets locked in cross-chain bridges. By enabling diverse protection with lower costs, UNION protection creates a safer environment for DeFi users on Avalanche. UNION’s bundled insurance products also allow for secondary insurance markets that further optimize risk management strategies and create more efficient financial markets.
Composability across different blockchain platforms is a priority to create a seamless user experience. UNION will leverage the Avalanche-Ethereum Bridge (AEB) to enable the porting of protection tokens across Layer-1 blockchain protocols, bolstering the absorption of protection liquidity.
Beyond the initial implementations, Avalanche and UNION will remain in close collaboration to create a safer, more efficient DeFi ecosystem for all.
About Avalanche
Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem. Avalanche is the first smart contracts platform that processes 4,500+ transactions/second and confirms transactions in under one second. Ethereum developers can quickly build on Avalanche as Solidity works out-of-the-box.
About UNION
UNION is a technology platform that combines bundled protection and a liquid secondary market with a multi-token model. DeFi participants manage their multi-layer risks across smart contracts and protocols in one scalable system. UNION decreases the entry barriers for retail users and lays the foundation for institutional investors. UNION’s full-stack DeFi protection is inclusive, composable, and brings battle-tested capital and pricing models from TradFi to the DeFi ecosystem.
