In this Arbitrum AMA, they are joined by DiamondProtocol, creators of Unibot, an automated leveraged liquidity provision platform for Uniswap v3, to discuss its design, product market fit, future pools/vaults and more.
Read our notes below to learn more.
Arbitrum
Optimistic rollup (L2) built on top of ETH.
Stats: $1B TVL, 1,7 million addresses, more than 100 dApps are built on top, no token yet.
DiamondProtocol
Modular vault protocol where DeFi strategists can build and deploy best-earning onchain strategies without writing code.
One of the products, UniBot, is a leveraged liquidity provision platform built on top of Uniswap v3, which allows users to provide liquidity using one single token.
Deployed on Arbitrum 2 months ago.
Has accumulated $4m in liquidity to Uniswap v3 on Arbitrum.
How Does UniBot Work?
Users provide liquidity in one token (currently USDC), the UniBot then lends the user a required amount of ETH from the lending pool to max out APR; This design acts as a buffer to any IL (impermanent loss) that user can face.
Lenders can provide ETH into the lending pool to earn stable lending interest with 0 market volatility risk.
UniBot also allows users to create a net long/short position on ETH using leverage to profit from both liquidity provision and directional market move.
Main idea is to provide users with a source of sustainable yield with minimum risk.
UniBot is a Diamond Protocol gen 2 vault which relies completely on DeFi and its existing infrastructure.
To get access to UniBot users need to join the Discord and get their wallet whitelisted first.
UniBot vs Competitors
UniBot’s APR is exponentially higher because it’s built on top of Uniswap v3 instead of v2.
Uniswap LPs on v2 get 30% APR when UniBot users get 100-300% due to optimal capital efficiency.
Competitors focus more on maximising fees; UniBot’s goal is to maximise overall PnL.
Automation and customization: traders can construct their own strategies, set up a stop loss/take profit for an open position, and have a customizable exit price.
Low average slippage around 0.1-0.2%.
Future Development
Currently in talks with GMX (largest perpetual DEX on Arbitrum).
Integrate more pairs to UniBot to increase a variety of options for the users.
Bring more retail, institutional and traditional LPs to Arbitrum.
Launch of Auto Vaults (self-executed UniBot strategy based on the preset backtested parameters) to lower the entry barrier for retail users by creating a “Set & Forget” LP mechanism (will be launched by the end of November).
Add more sophisticated auto features in Factory Vaults for professional traders.
DMO Token
Not launched yet, plan to do IDO in Q1 2023.
Building staking mechanism to implement revenue sharing & governance system.
Plan to distribute all the tokens to the community & become a DAO.
Airdrops & liquidity rewards will be offered to the community members & early adopters.
Dynamic DMO emission rate for Diamond ETH lending pool to incentives pool lenders in low interest environment; plan is to provide lenders with 8-15% APR throughout the year.