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Deunifi Investment

How It Works?

Basically, when you do an investment using Deunifi, the steps are the following:

  • You define the amount of UNI-V2 collateral to be lock in your vault.
  • You define the amount of each token involved in the operation to use from your account.
  • Optionally you define the tolerance for the transaction (If transaction conditions are modified beyond tolerance, then the transaction will be rejected) assuring that the final result it is what you expect.
  • Once defined the parameters mentioned above, you proceed with the transaction.

That's it.

An Example

Lets do the same investment that was made in the previous section.

Investing

In the example of the previous section, we suppose that we have initially 10 ETH, and that we want to invest in UniswapV2 ETH/USDT liquidity pool.

We supposed that the APY for this liquidity pool is 30%. And supposed that ETH price is 2000 USD.

The result we want to achieve is an investment of 40000 USD in ETH/USDT liquidity pool, with a debt of 20000 DAI (meaning a collateralization ratio of 200%), improving in this way, the APY from 30% to 56%.

The steps to invest using Deunifi are the following:

1) Create our MakerDAO proxy to manage MakerDAO vaults (this step is required once and only once, and it is not required if you already have a proxy).

2) Create our MakerDAO UNIV2ETHUSDT-A vault type (this step is required only once per vault type, and it is not required if you already have the vault type).

3) We define that we want to lock 10 ETH and 20000 USDT, and that we are going to use 10 ETH from our account complete the transaction. Deunifi App is going to display the expected collateralization ratio, expected APY, and other indicators. Then we proceed with the transaction.

The third step, integrates all the iterations and its transactions exposed in the previous section, using only one transaction.

Exceptionally, in case we want to use some token instead of ETH, it is needed to approve our proxy to use this token.

{% hint style="info" %} This is not only a lot easier, the results are predictable, and the investment costs are lower too. {% endhint %}

Removing the investment

Removing the investment is performed in only one step too. It requires to define the following parameters:

  • The amount of debt that we want to pay.
  • Optionally, the amount of DAI that we want to use from our account.
  • The amount of debt to be payed using token0 (in our example ETH).
  • The amount of debt to be payed using token0 (in our example USDT).
  • The UNI-V2 collateral amount to free from our vault.
  • The UNI-V2 collateral amount to remove from liquidity pool to receive token0 and token1 (in our example ETH and USDT).

Exceptionally, in case we want to use DAI from our account, it is needed to approve our proxy to use this token once and only once.

After defining this parameters, are displayed the expected vault status, the amount of UNI-V2 to receive, the amount of token0/token1 (ETH/USDT) to receive, and other indicators.

Then we can perform the transaction.

{% hint style="info" %} Again, this is not only a lot easier, the results are predictable, and the investment costs are lower too. {% endhint %}

Fees

The involved fees are the following:

  • AAVE Flash Loan Fee: This is the fee required to get the Flash Loan to achieve the investment transaction in only one operation. At the time of writing this documentation, the fee is 0,09 % of the Flash Loan amount (this amount generally is the debt to generate in our vault or the debt to be payed back).
  • Deunifi Service Fee: This fee is to support the development team that created and maintains Deunifi App. At the time of writing the fee is 0,1 % of the debt generated or payed back.

In our example the fees for the investment transaction would be:

  • AAVE Flash Loan Fee: 10000 DAI * 0,09/100 = 9 DAI
  • Deunifi Service Fee: 10000 DAI * 0,1/100 = 10 DAI

So the fees total amount would be 19 DAI.

To remove the example's investment the fees total amount would be 19 DAI too.

This fees are displayed in the transaction summary for each transaction to be performed in Deunifi App.

Security

To reduce at minimum risks regarding security, Deunifi was build to not have to store any asset, and to not need any special authorization.

All the assets of your investment are stored in MakerDAO vaults. In fact, once it is performed a transaction with Deunifi, you can immediately view the result using the MakerDAO Oasis App.

Additionally, all the token approvals are made only for your own proxy.

All the operations performed are done using your proxy.