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At the moment UNO operates on Polygon (Matic) Network, but some more nets can be included to the connection list in the future.
As UNO is an MVP-product, it has no fees till end of march 2022. But some fees will be included after official service start.
No, APYs do not include fees, all the fees will be taken after the APY calculation.
The difference between underlying yield and the total profitability is achieved because of regular recompounding and exponential growth.
yes, it does. It works as a automated balancer systems that checks best moments for making a recompound (low gas prices, better APRs etc) to generate the best APY
No, we don't offer our own LP token.
Impermanent Loss (IL) - is a specific type of loss based on price divergence that liquidity providers (LP) may experience.
Users provide their assets to a liquidity pool to become liquidity providers (LP). In return, they get a portion of the transaction fees that traders paid to the pool. Liquidity pools are used by the largest segment of automated market makers (AMM), called constant function market makers (or CFMMs). When the price of deposited assets in a liquidity pool changes compared to the time LPs deposited them, impermanent loss happens. The bigger this change is, the more they are exposed to impermanent loss. This price divergence can give traders or arbitrageurs profitable opportunities. They can execute the arbitrage trade until it brings the token price back in line with the wider market. This results in impermanence loss for liquidity providers.
Let's use a liquidity pool constructed on a constant product automated market maker (AMM) system as an example. This AMM uses a relatively simple formula as a pricing mechanism:
x * y = k.
This formula is used to calculate the prices of the two digital assets in the liquidity pool. In this pricing formula, k is constant. This means that the sum of the two assets contained in the pool (x multiplied by y) should always be the same (k) before and after a trade is executed.
Let's suppose that the two digital assets in the liquidity pool are ETH and DAI, and you deposit 1 ETH and 100 DAI. This type of AMM requires that the two deposited assets maintain a 1:1 ratio, which means that 1 ETH = 100 DAI. Since 1 DAI = 1USD, your deposited assets are now valued at $200. Now imagine that the total pool contains 10 ETH and 1,000 DAI, which is worth $2,000. This means you have a 10% share of the pool. The constant is k = 10 (ETH) * 1000 (DAI) = 10,000, which must always be equal before and after a transaction in the pool. Suppose that the ETH price rises to 400 DAI. According to the AMM formula, the price of ETH in the pool is still 100 DAI. At this time, arbitrageurs can buy ETH at a lower price from the liquidity pool until the token price is back in line with the external price. If we ignore the transaction fees, there will be 5 ETH and 2,000 DAI in the liquidity pool. At the same time, the constant k is still 10,000. If you decide to withdraw funds during this time, you can now withdraw 0.5 ETH and 200 DAI (10% of the pool), which equals $400 (excluding fees). That doesn't seem so bad, but If you would have hodled rather than deposited these tokens, you would now have $500 worth of assets. So that's how you can lose $100 compared to just holding your tokens, and this is what we call impermanent loss.
Farming is a DeFi concept based on staking or lending cryptocurrencies. Generally, users step as liquidity providers in order to recieve returns.
Staking is a way of getting a passive income by holding your tokens on proof-of-stake algorithm based net in order to get a reward. As bigger the amount of tokens is, as higher is a possibility to generate blocks. There are different types of staking like locked staking, flexible staking, but now it is one of the most important DeFi concepts, also called DeFi staking. General staking rules may differ in various nets, but basically it is about holding to get a reward as a proof for any net status.
Annual Percentage Rate (APR) is a simple interest from a particular investment over a 1 year period.
Annual Percentage Yield (APY) is a compounded interest from a particular investment over a 1 year period.
The calculation of the annual percentage yield is based on the following equation:
APY = (1 + r/n)n – 1, where:
r - the interest rate,
n - the number of times the interest is compounded per year.
There are different types of risks that can be included to staking risks: market risks, liquidity risks, lockup periods, rewards duration, security risks. Most of them are pretty common and are comparable to fiat currency risks.
The price movement is the basics of any market risk. For example, if you are staking a token with 10% APY, but the price drops 50% in value throughout the year, the final result will be a loss.
If you are staking an altcoin with low capitalisation, it barely has any liquidity on exchanges, you may find it difficult to sell your asset or to convert your staking returns into another crypto asset or fiat currency.
Some stakable assets come with locked periods during which you cannot access your staked assets. If the price of your staked asset drops substantially and you cannot unstake it, that will affect your overall returns.
Mostly staking rewards are being paid on a daily basis, but sometimes it works on weekly or different basis. As a result, stakers have to wait to receive their rewards. This shouldn’t affect your APY if you hodl and stake the entire year. However, it will reduce the time that you can re-invest your staking rewards to earn more yield (either by staking or by deploying assets in DeFi protocols).
Security risk consists of possibility to lose your tokens cos of security break. Private security break may appear if you don't backup your wallets or store your keys/passwords safely. Service security break may appear for example if the service is not audited, so please pay attention in both of types of situation.