UniLend Finance is a multichain permissionless lending and borrowing protocol for all digital assets. They are building a futuristic base layer for DeFi applications. ^[1][2][7]

Overview

UniLend Finance expands the DeFi ecosystem by enabling any ERC-20 token to be used as collateral for lending and borrowing. It introduces an innovative approach with isolated dual pool assets, allowing users to manage risk while maximizing the potential of their digital assets. Through its protocol, UniLend aims to encourage broader participation in DeFi, providing a platform where a wide range of tokens can be utilized effectively. The project has launched two versions of its protocol, further enhancing its capabilities. ^[2]

UniLend enables users to utilize their cryptocurrencies by supplying collateral to the network that may be borrowed by pledging over-collateralized cryptocurrencies. This creates a secure lending environment where the lender receives a compounded interest rate annually (APY) paid per block while the borrower pays interest on the cryptocurrency borrowed. ^[8]

UniLend’s mission is to “Make Every Digital Asset Productive”.  The concept for UniLend came from the idea of empowering every token with DeFi functionality. Essentially, UniLend Finance offers every DeFi capability for any ERC-20 asset, including the $300B+ of assets that are currently excluded from DeFi. ^[2]

Architecture

Dual Asset Pool

With the Dual Asset Pool feature, users can create a dual asset pool for lending & borrowing for any pair of assets in a permissionless manner and leverage a wide range of DeFi strategies. This dual asset pool model combined with the dynamic interest rate model also incentivizes users based on the pool to lend their assets. ^[9]

Permissionless Listing

This means that any ERC-20 token can be listed on the UniLend platform without any entity controlling the listing process, making lending, borrowing, and flash loans functionality accessible to every token. ^[10]

Non-Fungible Liquidity

UniLend Finance has implemented NFTs as certificates for equities. NFT will represent the lender's right to withdraw funds from the pool. These NFTs will determine the user’s liquidity position in the pool and are transferable. ^[10]

Concentrated Liquidation

The UniLend team introduced a liquidation mechanism known as Concentrated Liquidations. This mechanism empowers a third-party liquidator to efficiently liquidate multiple addresses in a single transaction, utilizing a queue system for optimized execution. ^[11]

Flash Loans

The UniLend protocol supports Flash Loans, enabling uncollateralized loans provided that the borrowed amount and fee are returned within the same transaction. In case borrowed liquidity is not returned within one transaction block, the whole transaction is reversed to undo the actions initiated until that point. ^[11]

There are no restrictions for lenders and borrowers. Users can lend and borrow any ERC-20 tokens as the protocol is permissionless. Users can also create a dual asset pool for lending & borrowing for any pair of assets in a permissionless manner with price feed oracles and gas optimization. ^[10][11]