GM, this is your Daily Bolt briefing.
In today’s edition, we're providing you with an abridged breakdown report. This briefing includes a selection of some of the most important data points from our project breakdown on Unstoppable DeFi, a project providing spot and margin trading, integrated borrowing and lending, single-side LP deposits, and more. Unstoppable DeFi aims to provide everything a CEX has to offer, including a smooth UX, fiat on/off ramps, and mobile phone compatibility.
For those interested, you can access this report in its entirety simply by signing up for a Free Account. Click here to view the full breakdown report. Browse through over 40 pages of in-depth research, everything you need to know about Unstoppable DeFi.
Over and out.⬇️
Overview
Unstoppable DeFi is a protocol on Arbitrum that is building a decentralized alternative to centralized exchanges.
Rather than simply building a spot Dex like Uniswap, the protocol envisions additional features such as:
Margin trading.
Integrated borrowing/lending.
Trading from a mobile phone.
Simple signups and improved UX.
Single-sided LP deposits with no impermanent loss.
Fiat on/off-ramps.
Intuitive wallet for beginners and DeFi-natives alike.
Unstoppable DEX is meant to be a complete replacement for what a Dex can offer. It will provide the full infrastructure required to on/off-ramp users with fiat currencies and let them trade spot and with leverage and earn yield.
Fully decentralized and on-chain.
Built-in margin trading with high leverage, low fees, and support for limit, stop loss, and take profit orders.
Single-sided liquidity deposits (no impermanent loss for LPs).
Real yield in ETH and stables
No counterparty risk for LPs.
Deep liquidity sourced from Uniswap/Sushiswap/GMX and others.
Unstoppable Bridge aims to make it seamless to move from fiat to crypto and vice-versa.
Users will have access to easy-to-access on/off-ramps as a result of Unstoppable’s partnerships with fully trusted and regulated banks.
This will make it possible to mint and redeem 1:1 backed stablecoins directly from a personal or corporate bank account.
The ultimate goal is to become the “go-to” place on-chain that provides 24/7 1:1 backed FX swaps as well as FX leverage trading capabilities.
Deep spot liquidity will make it possible to introduce RWA (Real World Assets) as well, such that users and protocol treasuries can keep earning yield on-chain while having their principal backed by off-chain assets.
Unstoppable’s wallet aims to integrate advanced smart contract features with account abstraction in order to create a user experience that is intuitive and helpful to both beginners and advanced users. The main goal behind this feature is to reduce the barrier of entry for new users and grow the existing market of DeFi users.
Roadmap
The project roadmap follows a staged product release:
Phase 1: Launch core meta-dex to build a decentralized replacement to centralized exchanges: spot trading, futures, RWAs, FX…
Beta live on testnet and mainnet deployment scheduled for Q2 2023.
Phase 2: Launch instant on/off-ramp to make crypto usable in real-time in a frictionless manner.
Scheduled for Q3 2023.
Phase 3: Launch friendly self-custodial wallet to enable mass adoption.
Scheduled for Q4 2023.
Phase 4: Reach mainstream adoption and onboard the next generation of DeFi users.
The early beta of Unstoppable:DEX is already public and can be tested on Arbitrum testnet. The mainnet launch will be on Arbitrum and its launch is targeted to go live and generate revenue in Q2, after the community review process and third-party audits are complete.
Economics
Sector Outlook
One of the biggest hurdles for the mainstream adoption of Crypto and Web3 is the user experience (multiple networks, hexadecimal addresses, unintuitive interactions with smart contracts, seed phrases…). The value proposition of web3 infrastructure comes from giving users a high degree of self-sovereignty over their credentials, capital, and data. However, most of the time this comes at the expense of user experience, which is a significant detriment for mass adoption. As a matter of fact, one of the great challenges with making blockchain applications usable for average users is security.
Total Addressable Market
Due to the scope of the project, Unstoppable will be present across many verticals, ranging from decentralized exchanges (spot, derivatives, and forex) to bridges and wallets.
The spreadsheet attached below lets users modify the values in order to estimate the projected yearly revenue that can be achieved by Unstoppable.
By bringing FX pairs and RWAs (Real World Assets), Unstoppable is also anticipating times where RWAs will play a large role in decentralized trading. This exposes the protocol to a broader market share. For instance, protocol treasuries will have the option to keep their funds in assets that are fully backed by off-chain collateral.
Competitive landscape
The latest developments in Layer 2s, led by Optimism and Arbitrum, have made it possible for perpetual futures to be implemented on-chain. This was not possible in the past due to the high gas fees of the Ethereum network.
The majority of decentralized exchanges offering leverage for trading rely on external oracle feeds and a liquidity pool where traders trade against LPs. This way, liquidity providers win when traders lose and vice-versa. However, this is not the way margin trade will work in Unstoppable. In fact, the mechanism design of Unstoppable’s margin trade makes it possible for both parties to obtain a positive outcome.
Most decentralized exchanges offering leveraged products rely on perpetual futures contracts such that the positive PnL of traders forces the PnL of liquidity providers to be negative and vice-versa.
Web3 Wallet landscape
When it comes to interacting with web3, crypto wallets are the most important piece of a consumer’s journey. However, the UX of today’s wallets doesn’t fully reflect how critical it is to web3 usage and adoption.
Most users initiate their journey on centralized exchanges due to how simple it is to convert capital from fiat currencies to crypto assets. Despite the increase in the number of service providers offering on-ramping services (such as Ramp, Transak, or Moonpay), it is also worth noting that there are greater difficulties when it comes to off-ramping. This could be because wallet providers might want to get users onboard but don’t necessarily want them to leave.
Thank you for the issue. I wonder if Unstoppable DeFi will at some point run into the brand collision issue with Unstoppable Domains. That maybe an odd one.