Liquidity and Unifi: A crisis & Opportunity.

Unifi Protocol has successfully implemented its multichain swap based on audited smart contracts. It is the rising star in DEFI space with a growing community. With any new and growing project there are challenges. In the swaps world, Liquidity is a valuable metric for all stakeholders and users of said platform. Liquidity allows for larger trades to be conducted. It protects traders from large swings in price whilst trading and is a metric of trust that Liquidity providers put in the platform’s future as their benefit is directly linked with volumes on the platform.

Unifi Protocol is at the point where the team has built a robust SlowMist audited working protocol, but is lacking on many pairs; enough Liquidity to attract traders for the various coins listed. This is a problem as without Liquidity, the platform will not function as intended and never attain the adoption desired.

GGT Gaming as, running for CCR and becoming a stakeholder, has an interest in addressing this issue. There are various means to solve this. One of them is adding novel tokens that are not listed anywhere as to provide scarcity and opportunity for traders to come and trade on the platform, generating both liquidity and trade. This method is temporary. Once these tokens loose steam or are listed somewhere else, the LP’s go away and so do the traders, creating a graveyard of tokens.

Second solution is to directly benefit liquidity providers across the Unifi Protocol network. GGT Gaming will back this if we are to become CCR with the support of the community. This involves assigning a certain portion of $UNFI released every month (set to 100k $UNFI as is currently known) to the LP’s for providing the Liquidity.

This $UNFI can either be spread bottom-up, meaning the lowest liquidity pairs receive the highest $UNFI, OR be spread top&bottom, aka support the top mainstream pairs as well as encourage the lower pairs, tapering towards the middle. These proportions will be determined after checking the numbers and in consultation with the community. The benefits of this are simple:

1. LP’s receive a direct incentive to provide liquidity.
2. LP’s are not reliant only on trade volumes.
3. LP’s will stay in a pool for longer.
4. $UNFI will be distributed to a vital part of the community and put to good use.
5. $UNFI will attract liquidity hence the long term sustainability and usability of the platform.

We as CCR will support proposals to this end.

GGT Gaming will also support the addition of new, exclusive tokens to the platform which will encourage new players to be exposed to $UNFI and conduct LP and Trade activities. This hybrid solution is our best bet to address the Liquidity issue that will affect the platform in the coming time.

Lets be ready for it.

Galacticans, feel free to share this. We are open to your ideas and inputs on anything related to Unifi protocol, meet us on the group: HERE and lets chat.