Unreal Finance allows anyone to tokenize their future yield via a smart contract. With tokenized yield a lender can earn lock-in their interest rate (earn fixed interest), speculate & trade interest rate in different protocols, make use of instant arbitrage opportunities created by different protocols or just sell the token to earn instant interest.

There is no way in the market to speculate on yield currently
Retail wont use variable rate loans; fixed rate loans is the next step in lending
Our new 3 token model allows us to separate yield from principal and trade both of the separately
There are tons of use cases like: acquiring a fixed interest rate, yield arbitrage and so on
Users will be able to get fixed interest rate loans instantly and traders will be able to speculate on interest rate!
Creating a new Defi yield primitive
Potential TVL is around 20 billion dollars; all lending protocols and farms can be integrated
The future is exciting! We are building on L2, going multichain and building an AMM for depreciating assets like options, bonds and UTokens

How It Works

To allow owners to set a fixed interest rate on their yield for a fixed period of time, users will deposit their yield token (cUSDC, aDAI etc) into the Unreal Smart Contract. Two tokens will be issued: UToken and UOS.

UToken

UToken is a synthetic token minted by the protocol. UToken represents the future yield that will be generated. For example, a cUSDC-UToken represents the future yield generated by our capital inside Compound’s USDC lending pool. A UToken is just an ERC20 token and there are various ways to trade this synthetic token on Ethereum.

UOS

UOS is the Ownership Token for Unreal Finance. A user gets UOS tokens equivalent to the amount of underlying asset deposited. For example, 100 cUSDC deposited on Unreal Finance will generate 100 cUSDC-UOS tokens. The user can redeem the entire UOS for an equivalent amount of underlying from the contract when he wants to exit.

User Journey

Users mints UToken and UOS through Unreal Finance by depositing yield tokens. UOS represents ownership of the underlying yield token, and UToken represents the future yield of the underlying yield token.
The Minter can sell the UToken via any popular AMMs or can add liquidity to the UToken pair.
UTokens act like a regular ERC20 token — that is, it can be purchased or sold. After the change of ownership has occurred, the entitlement of subsequent interest revenue tied to the underlying yield token will be changed to the new UToken owner.
The UToken and UOS token can be easily converted to the underlying asset.

Use Cases

Fixed Interest Rate

The interest rate on current lending protocols fluctuate regularly. But suppose Alice wants to earn a fixed interest rate, she can use Unreal Finance. Alice deposits her interest-bearing tokens to Unreal Finance and mints UToken and UOS token. Alice can instantly sell the UToken at the exact yield she requires.

Yield Arbitrage

Unreal Finance provides arbitrageurs more opportunities to generate profit with minimal risk. Arbitrageurs can now arbitrage between different yield sources like Aave stable rate, a new yield farm and Unreal Finance and make profits while making the market more stable.

Capital Efficient Yield Exposure

Currently to obtain yield exposure you need to deploy capital that will generate the yield. For example if you think LINK lending rates will increase you have to deposit and lock LINK to get the yield benefits.

But using Unreal Finance, if a trader holds the view that lending rates on LINK will continue to increase, he can simply buy UToken tokens from the market as UTokens are synthetic yield tokens and track the yield itself.

For example, assuming the yield of USDC on Compound is at 12% pa, the trader needs to deposit and lock 100 USDC for an year to earn 12 USDC. If the trader thinks that in future the interest rate on Compound will increase, the trader can simply purchase UToken instead of locking the funds. This method is much more capital efficient way to gain yield exposure.

Build On Unreal Finance

Unreal Finance brings a new DeFi primitive into the market that allows people to speculate on capital yield; it can allow creation of several new products like Interest Rate Swaps, Spread Trading, Yield Protection products and so much more! We are excited to see what our community builds on top of Unreal Finance

Unreal Finance UGT

Unreal Finance Historical Markets