UND is a synthetic token that is minted by Unbound Finance when liquidity providers give their liquidity pool tokens as collateral. The UND is pegged to the value of US Dollar and is considered a stable coin. It reinforces UBN’s liquidity for UBN holders who have stored their UBN in liquidity pools in Uniswap.
The UND is given to you as a loan which once returned to Unbound, you get back your LP tokens. Unbound uses a loan-to-value ratio system where, for every number of LP tokens offered up as collateral, a certain percentage of UND is minted. For example if it’s set at 50 percent, for every $100 worth of LP token deposited, you mint up to 50 UND. Its smart contracts are perpetual, meaning they don’t have a maturity date on the money that has been minted. There is therefore no deadline for repayment of funds and you continue to earn from your LPTs.
A step by step tutorial on how to mint UND tokens using Uniswap LP tokens after providing liquidity to Ubricoin.
- Access the Unbound website by clicking on https://app.unbound.finance
- Click on connect wallet to link the wallet that has your liquidity pool tokens from Uniswap.
- You are then provided with options to either connect to your Metamask wallet or scan with WalletConnect. If your Uniswap LP tokens are in Metamask, choose the former option, otherwise choose to scan.
- Choosing to scan gives you two options: the QR Code and Desktop. Supposing your wallet is on another device, you can choose to scan the QR code provided. If you’re using the same desktop device to access your wallet, choose the desktop option and select your wallet from the options provided.
- Select your desired network from the tab to the left side of your wallet address. You’ll notice that there are Mainnet and Testnet options. The difference between mainnet and testnet is that mainnet means the protocol is fully developed and deployed; therefore your transaction is being broadcasted, verified, and recorded on blockchain. Testnet means that you can use the blockchain to test or experiment without affecting or risk losing funds from your wallet.
- Click on Select token to select the asset type which you want to provide as collateral. In this case, we’ll be using UBN-ETH, UBN-USDT or UBN-BTC. It all depends on the type of UBN liquidity you provided to Uniswap.
- Set the amount of LP tokens you would like to lock under the Lock option.
- Select Mint to view the number of UND tokens that can be minted using your LP tokens. Unbound charges a one-time minting fee to you. The fee helps to provide stability for their ecosystem. It may vary to help UND maintain its dollar peg.
- After verifying the minting details, confirm the transaction by clicking on Confirm Mint and confirm the transaction on your wallet.
You have successfully minted UND from your Uniswap LP tokens. The UND is immediately available to be used.