The simple structure of the Unreal finance protocol and the division of tokens into separate yield and ownership tokens leads to a lot of ways that our platform can be used.
Future Yield Tokenisation
The core functionality of Unreal finance is the separation of any yield-bearing asset into Ownership Tokens (OTs) and Yield Tokens (YTs). This creates an entirely new market for yield but also enables the trade of locked positions on Unreal finance.
Fixed / Upfront yield
Through the Balancer AMM, users who wish to hedge their risk on APY volatility can directly exchange their YTs for the underlying asset at the current market rate designated by the AMM. Not only does this provide fixed-rate interest, due to the atomic nature of the swap, but also upfront yield - meaning you can get your APY upfront, at any time.
Through the creation of an explicit yield market, YTs allow arbitraging interest rates between different protocols - making for a more liquid, healthy and fair ecosystem.
Staking OT and YT tokens on AMMs
Post-deposit users can provide liquidity for OT and YT tokens on the AMM to gain trading fees and liquidity mining rewards.
Leveraging whilst mitigating your liquidation risk
Users can sell their OT tokens, get back whatever they deposited minus the discount, andthen use this new capital to re-deposit and accumulate more YT tokens - essentially giving them more yield without putting in more capital!
Hedge against falling rates
User can sell their YT tokens and buy more OT tokens from the market if they are bearish on the interest rate in the coming months for an asset and an underlying platform.
Users can sell their OT tokens and buy YT tokens from the market if they believe that there will be an increase in yields.
Raise money for your DAO without increasing debt
Protocols like Yearn could get their future revenue in cash instead of minting new tokens or raising money from investors.