What is vUNIT?

vUNIT is our new kind of index coin introduced by MonoX, it is the glue that holds the protocol together. vUNIT is an index token of all the assets listed on our protocol. Our protocol solves the capital inefficiencies of liquidity pool pairs by grouping deposited tokens into a virtual pair with the vUNIT. This allows us to offer single token pools whereby the user only needs to deposit one token to the pool instead of two. vUNIT is backed by all the assets in MonoX pools that have a positive vUNIT balance.

When a user first deposits liquidity to create a new pool, they set a starting price for the asset. This means that every asset in MonoX pools expresses their value in vUNIT. Therefore trading works by forming a similar pricing curve to Uniswap except while they use the ratio between two tokens, we have a starting price and a would be price.

Pricing Mechanism

If a user sells from the starting price the asset depreciates in value, if someone buys from the starting price the asset appreciates in value. As such, we use starting price and would be price instead of the ratio between Token A and Token B in the xy=k constant product formula. Our pricing algorithm is based on Uniswap’s model found here. However in this calculation vUNIT supply is equal to infinity and is the second token in the formula.

vUNIT and Monoswap Equations

The equations for vUNIT and Monoswap are as follows:

How To Get vUNIT

Users can swap any ERC token directly to vUNIT.

When users withdraw liquidity, they will receive vUNIT (as well as their liqudiity) if there is a positive vUNIT balance in the pool.

How is vUNIT Backed?

The pair is virtual. vUNIT is a real token that is an index of all the other assets in our pool. vUNIT is technically backed by all the assets in the pool. However, it’s more accurate to say that it is backed by the sell function because when a user sells into vUNIT it mints the physical token. In essence, vUNIT is backed by the liquidity itself, not the assets. vUNIT is only backed when there is a positive vUNIT balance in the pool. Trustless listing pools cannot go below 0 for vUNIT balance.

Can I use vUNIT?

Yes, you can mint vUNIT by trading directly into it.

Last updated