A Deep Dive in Unitus V2’s upcoming features — Part II (Segregated Mode)
One of the features included in the next major V2 update for Unitus is the Segregated Mode, which will enable to create optimized markets for tailored assets while keeping risk management and efficiency paramount.
In case you missed it, read about the features and timeline of the upcoming Unitus V2 here, or keep scrolling for a deep dive in the upcoming Segregated Mode!
Introducing the Segregated Mode
The evolution of DeFi has seen a proliferation of diverse assets and lending protocols. However, managing risk and ensuring efficient capital allocation remain ongoing challenges. Enter Segregated Mode, a feature designed to address these challenges head-on.
While the Supercharged Mode, which we analyzed here, will be ideal for assets belonging to the same categories as LSTs and stablecoins, the Segregated Mode is instead designed for long tail crypto assets.
Segregated Mode allows the governance to designate certain assets as ring-fenced, with the upgrade of predefined debt ceilings denominated in USD as well as predetermined borrowing assets list, so that the debt ceiling can be calculated by amount of borrowed assets against segregated assets. These key changes enable Unitus to welcome markets for new assets while ensuring prudent risk management within the protocol.
Benefits of Segregated Mode
Segregated Mode unlocks a host of benefits for users, including:
- Tailored Risk Parameters: Users can access markets with specific risk parameters tailored to individual assets, allowing for more customized borrowing options.
- Prudent Risk Management: With predefined debt ceilings denominated in USD, Segregated Mode ensures responsible risk management within the protocol, reducing the likelihood of systemic risk.
- Enhanced Capital Efficiency: The Segregated Mode unlocks a greater capital efficiency for long tail crypto assets that still are not present on any Money Market Protocol.
- Expanded Offerings for Unitus: Segregated Mode enables the integration of long-tail assets into the Unitus ecosystem, diversifying market offerings and catering to a broader range of users.
- Expanded Utility: For protocols, adding lending support will expand utility for their tokens, potentially increasing its overall value and market adoption.
A permissionless process
The Unitus Governance will play a key role, retaining the authoruty to vote on the proposal and choose which long tail assets should be integrated into the Unitus ecosystem under the Segregated Mode.
Once Unitus V2 goes live and the Segregated Mode will be enabled, users and protocols will be able to publish a proposal on the Unitus Forum to open a segregated market for their assets.
For a successful proposal, kindly rely on the instructions given on our documentation, in particular on the sections dedicated to: Methodology | New Asset | Risk Factors.
Conclusion
As the crypto landscape continues to evolve, the demand for an efficient yet secure Money Market is on the rise. With the introduction of Segregated Mode, Unitus V2 is poised to lead the charge in redefining the limits of DeFi, expanding the market offerings but also enhancing the overall resilience and adaptability of the protocol.
As we look ahead to the grand unveiling of Unitus V2, we invite you to join us on this exciting journey and embrace the limitless possibilities of DeFi!
