Unicly is a decentralized NFT protocol where users can freely tokenize their assets and trade them, as well as implements DeFi concepts such as staking, yield farming, and liquidity mining.
Today’s non-fungible token (NFT) market is growing at an incredibly fast pace. However, there are still some hiccups along the way. Liquidity issues are one of the biggest concerns with trading NFTs. Unicly has a proposal in effectively addressing this, perhaps breaking one of the problems hounding NFT exchanges today.
Unicly combines the yield generating power of decentralized finance (DeFi) with the tokenization model of NFTs. More than making NFTs widely accessible and affordable to a bigger potential market, it also taps on the DeFi users who are looking for profitable farming opportunities.
What is Unicly?
Unicly is a decentralized NFT protocol where users can freely tokenize their assets and trade them. The platform also implements DeFi concepts such as staking, yield farming, and liquidity mining. But among these promising features coming from NFTs and DeFi combined, Unicly’s design and architecture makes it easier for everyone to participate in its whole ecosystem.
Unicly offers an easy-to-use NFT creator and an automated market maker (AMM) enabled marketplace. This not only allows anyone to create their own digital tokens, but also the best prices for traders whenever they make transactions through the platform.
One of the most interesting NFT applications in the protocol is ‘fractionalization.’ This is a process that allows multiple users to purchase an NFT in multiple portions. This enables multiple advantages, such as better liquidity, affordability, and manageability of their NFT holding.
Solving the Problems with NFT Fractionalization
The problem with other NFT platforms is liquidity. It is because a single NFT can only be bought by one buyer alone. No other person can purchase the same NFT or even own a share of it if they wanted to, unless different buyers both engage in an internal agreement to share an NFT. Nevertheless, it is extremely unlikely to happen. And even if it does happen, such sharing agreements will have to bank on trust. This can be quite a problem sooner or later.
The other problem is the fact that expensive NFTs can only be bought by one person, despite the volume of demand for NFTs. This is an issue because it can limit the NFT market to only those who have the financial resources to buy them at incredibly high bidding prices. If we were to aim for more people buying into NFTs and supporting the concept behind it, adoption should be the goal.
Hence, the need for fractionalization. Unicly allows different users to purchase a portion of an NFT and trade them even in the same way they would with other cryptocurrency assets. They can even later sell their share of an NFT in the marketplace if they want to. The point of Unicly’s approach is to make it easier for anyone to purchase NFTs.
Subsequently, this model allows for greater NFT liquidity. Selling a token wouldn’t have to depend on finding a single, highest-bidder anymore. An NFT can be launched through the platform and the Unicly community around the world can purchase them freely. Such a model allows for greater liquidity in Unicly’s market ecosystem. And more than these advantages, the fact that users can purchase some portions of an NFT also enables them to better manage their own portfolio and risk exposure.
uTokens and the Unicly’s Fractionalization Model
uToken is the asset that backs Unicly’s NFT collection market. Users can create their collection of NFTs through the tools provided by the platform which they can fractionalize and list in its marketplace.
The requirements in minting uTokens are simple. Users only need a browser-based wallet that contains the NFTs they want to put in their collection. uToken supports Ethereum-based NFTs such as those that belong to the ERC-721 and ERC-1155 compliant assets.
The uToken creation tool allows users to designate a name for their collection, its total supply, and the percentage of supply required to unlock the NFT collection. By unlocking, it means that once the threshold of supply is met, bidders can vote to begin claiming their share of the collection. If ever there are no bids, the NFTs are returned to the creator.
Again, the creator of a uToken has the liberty to include any supported NFT on the collection. Then, the user will be asked to transfer their assets to the smart contract assigned to keep the underlying NFTs for a collection. Beyond these features, the creator of a uToken can add liquidity to its NFT pool.
Since Unicly implements a flexible collection management model for uToken creators, they can add more NFTs as they wish to even if they have already issued them. This way, they can also increase the collective value of their uToken.
After the creation of a uToken, the creator will be given their own page that will contain any information that they want to show to prospective bidders. Then, traders can begin bidding on an NFT.
If a user remains the highest bidder for the same NFT, they cannot be able to revoke their bid for a maximum of three days. But if someone beats their bid, then the new higher bidder can unbid and make a new bid instantly. Then, the top bidder on an NFT can begin claiming them as soon as the collection is unlocked.
Utility of uToken
uToken also performs a governance function. The holders of uTokens can vote on the proper value of an NFT collection. They are also given incentives to participate in the voting function of the platform. Also, uToken holders can earn more rewards as well for promoting their collection to attract high bids for their NFTs.
UNIC Token, Liquidity Farming and Governance
UNIC is Unicly’s native utility token, which backs the yield farming mechanism of the platform and its decentralized governance functions.
UnicSwap is the liquidity farming protocol of Unicly. Users who want to provide liquidity to the pool of NFTs can freely do so to earn rewards. It also implements a similar AMM model with Uniswap in providing liquidity to uTokens in the platform.
Liquidity providers earn UNIC tokens as a reward for staking their assets in the NFT pools. UNIC holders can also vote on what pools to whitelist, or the uTokens that are yet to be unlocked. The UNIC that they earn can be converted to xUNIC to farm more UNIC.
UNIC holders can vote on important protocol decisions through community proposals. These are things like uToken whitelistings and other protocol upgrades or amendments.
While the NFT market is emerging as one of the most popular blockchain use cases today, most of the markets remain inaccessible to more potential adopters. This can be difficult in the long run because most systems allow a privileged few to purchase NFTs and prevent others from participating. Unicly’s fractionalization model is the perfect way to address this issue.
Beyond making NFTs more accessible to interested markets, it also offers exciting DeFi products that can attract the growing number of yield farmers in the whole crypto space. And because it provides bigger income generating opportunities for its users when compared with other NFT projects in the market, we can never be wrong in thinking that this project will belong to the biggest NFT protocols in the near future.