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12th October 2021 > > Unbound.

tl;dr

Decentralised Finance (DeFi) just got a whole lot smarter.


Market Snap







Market Wrap

I know what you are all thinking.


When we break $60k again, will that be sustainable?


You could ask the techies, and then completely ignore what they say. At least, that is what I do.


You could ask the analysts at J.P. Morgan, and then completely ignore what they say. That is what everyone else does.


But just like the $20k price point, one day $60k will be breached on the upside for the very last time.


Occasional Series – Jamie Dimon, CEO of J.P. Morgan

Dimon has consistently been a high-profile critic of BTC, at one point threatening to fire any of his traders who bought BTC for their personal account. At the time he described BTC as a fraud “worse than tulip bulbs”, in a nod to possibly the greatest financial disaster of all time.


Not one for self-reflection, despite all the evidence to the contrary, Dimon refuses to change his mind:


“I personally think that bitcoin is worthless”.


Curious Cryptos’ Commentary – Unbound part 2

On the 5th October 2021 the CCC commented on a new Decentralised Finance (DeFi) protocol called Unbound.


Describing itself as a “debt free liquidity provision system” Unbound makes what seems on the face of it to be two extraordinary claims.


The first extraordinary claim is that the interest you pay to borrow native UND or native uETH is zero percent.


The second extraordinary claim is that there is no liquidation risk.


I was struggling to understand how any platform could offer just one these two characteristics let alone both at the same time.


Well, now I know.


This platform is specifically targeted at providing liquidity for Liquidity Pool Tokens (LPTs).


What are LPTs I hear you ask.


An early iteration – and still the most wildly successful – of DeFi was to provide liquidity to a pool to allow others to exchange one crypto for another.


As an example, you could provide USDT and ETH in equal value to a liquidity pool with an Automated Market Maker (AMM). We won’t go into the mechanics of an AMM here and now, merely to say that use of an AMM precludes the need for third parties to show bids and offers, as is traditional in all financial markets. As an aside, providing two ways for clients is exactly how I spent much of my life before now.


Those LPTs can be used in a number of ways, the most common of which is to stake them back into the protocol and earn yet more of the same LPT. This – in the broader sense of the term – can be viewed as yield farming.


Alternatively, they can be swapped for other cryptos or even fiat.


Unbound acts as a staking pool for these LPTs, allowing you to mint native UND and native uETH.


There is an implicit – and a crucially accurate – assumption that at some point in time, you will want and need to unlock the original liquidity you provided to the liquidity pool on that other DeFi platform.


This assumption allows Unbound to charge zero percent interest and remove all liquidation risk.


DeFi just got a whole lot smarter.

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