UNION Partners With Qi Dao to Bring C-OP & U-CDS to its 0% interest Stablecoin Lending Vaults
UNION is pleased to announce that we have partnered with Qi DAO, the protocol enabling users to borrow stablecoins at 0% interest using their native crypto tokens as collateral. UNION’s C-OP product will enable Qi DAO users to hedge their long positions in their MAI vaults when minting MAI — the collateral-backed (e.g., MATIC) stablecoin issued by Qi DAO and soft-pegged to the USD.
“Qi DAO represents a true, next-generation DeFi platform, built as decentralized from the ground-up. Our work with C-OP and U-CDS is an exciting fit for their community objectives,” said Michael Beck, UNION’s project lead.
Qi DAO is a community-governed protocol for minting stablecoins collateralized by users’ crypto assets natively built on Polygon — an Ethereum-based, layer two scaling network that enables fast, low-cost transactions. Qi DAO allows users to hold their crypto while utilizing its underlying value to leverage their crypto positions, yield farm across DeFi, or use their issued debt for other reasons.
Notably, loans on Qi DAO are issued in the native stablecoin of the protocol, MAI, which comes with 0% interest. This differs from other over-collateralized lending platforms like MakerDAO where interest rates are a function of the utilization ratio of the credit market. As a result, Qi DAO is more appealing to capital-aware users, and enables the protocol to more readily accept a diversity of collateral types, such as yield-bearing assets.
Using C-OP, Qi DAO users can mint MAI backed by their long positions in crypto collateral and then hedge those positions. Additionally, the incorporation of U-CDS, UNION’s “Crypto Default Swap,” will mitigate convex, downside price risk to Qi DAO vaults where user crypto assets are locked relative to the outstanding supply of MAI.
$QiDao is all about giving users financial tools that give them control of their crypto assets. Our partnership with Union is aligned with that mission. This will create opportunities for users to safeguard their returns through derivatives. We look forward to seeing how this partnership will continue to develop in the future,” said Lao Zi of Qi DAO.
Currently, only MATIC, USDC, and amTokens are supported as collateral by Qi DAO. However, UNION’s C-OP coverage for DOGE, WBTC, and WETH is set to go live soon and those assets, with the exception of DOGE, are on the horizon for Qi DAO to vote on as collateral for minting MAI. In its current form, UNION will extend C-OP to Qi DAO users minting MAI with MATIC as collateral, with reduced downside risk provided by options.
C-OP also defends against downside price risk in the underlying collateral by dampening the effects of a reduced borrowing capacity, which furnishes MAI minters with more flexibility in managing their vault positions during excessive market volatility.
Moving forward, UNION and Qi DAO will explore further synergies between the two ecosystems, including potentially offering UNION smart contract coverage for Qi DAO vaults. With the combination of C-OP, U-CDS, and Qi DAO’s zero interest loans, accessibility barrier to DeFi is lowered via increasing the capital efficiency and safety of user assets.
About Qi DAO
QiDao is a way for you to hold on to your crypto while still being able to spend its value. It allows you to borrow stablecoins (tokens pegged to $1) at 0% interest, without selling your crypto. The stablecoin you borrow from these loans is called MAI (previously known as miMatic). Anyone can create QiDao vaults and deposit collateral to borrow against. All you will need in order to start is some of the accepted collateral types in your wallet, and some MATIC to cover any transaction fees. More details can be found in our How To Guide.
UNION is a technology platform that combines bundled protection and a liquid secondary market with a multi-token model. DeFi participants manage their multi-layer risks across smart contracts and protocols in one scalable system. UNION decreases the entry barriers for retail users and lays the foundation for institutional investors. UNION’s full-stack DeFi protection is inclusive, composable, and brings battle-tested capital and pricing models from TradFi to the DeFi ecosystem.
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