Krypital completes strategic investment in Bunicorn DEX
— Krypital completes strategic investment in Bunicorn DEX
Reposted from Krypital Group’s Medium publication: https://medium.com/krypital/bunicorn-the-first-all-in-one-bsc-powered-dex-f255b2c4af9
May, 2021, Krypital Group officially announced the completion of its strategic investment in Bunicorn, the first BSC-based multifunctional all-in-one DEX platform built on Binance Smart Chain.
Why Invest in Bunicorn
The DEX track has gained exponential growth in the past two years. The Automated Market Maker AMM mechanism has been proven viable and many projects such as Balancer, Curve, Mooniswap, Kyber DMM, etc. have come up with several proposals to improve the AMM mechanism, including reducing impermanent losses, lowering slippage, avoiding early runs and improving capital efficiency. These platforms have a variety of different features and trade-offs.
For example, Balancer is one of the first decentralized exchanges to introduce the concept of AMM. After the initial liquidity mining boom, hacking, the launch of LBP, the release of V2 and other events, Balancer has grown steadily among the DEXs, and through innovations such as LBP, Balancer has gained a firm position among the Tier-1 DEXs, although it is not as good as Uniswap and Sushiswap. At present, the TVL on Balancer has reached $3.5 billion, the market value of token BAL has reached $670 million, and the FDV has exceeded $6.2 billion, and it has also obtained backing and investment from top VCs.
Curve is another DEX build on Ethereum focused on stablecoin exchange, due to its optimization in capital efficiency and improvement in stablecoin exchange slippage, Curve has become the largest stablecoin DEX. The TVL in Curve has reached $8.7 billion, and the market cap of token CRV is $1.27 billion, and FDV is over $11.8 billion.
Problems still remain with the common swaps on the market, such as:
- Most DEX liquidity only supports adding a ratio of 1:1 of two tokens to the liquidity pool. One must have two tokens with the same market cap to be a liquidity provider. This usually entails a high risk of unpredictable losses.
- Not suitable for exchange between stablecoins due to limited liquidity and resulting slippage.
- High gas fees and low speed of ETH.
- Monotonous functionality, users tend to sell mined tokens immediately after receiving mining rewards, which is detrimental to ecological sustainability and poor user retention.
To solve the above problems, Bunicorn combines all the best solutions on the market and integrates them seamlessly to create Bunicorn. We do think there is still a lot of room for optimization in the DEX market.
Bunicorn will integrate token swap/exchange (like balancer on ethereum), Stablecoin exchange (like curve on ethereum), and followed by Q4, 2022, and it will also add products such as lightning loans, derivatives trading, etc. The goal of Bunicoin is to become an all-in-one decentralized exchange.
Bunicorn supports two types of liquidity pools at the same time
The first is called Flexible pool
The Flexible pool is based on Balancers’ N-dimensional invariant surface AMM mechanism. It allows liquidity providers to add 1–8 assets at the same time and customize parameters such as the weight of tokens.
As shown in the figure, the Flexible pool will be subdivided into two models: shared pool and smart pool:
- Shared pool mode: anyone can freely add or remove liquidity to the pool.
- Smart pool mode: the pool creator can set to change 6 different parameters such as change tokens, change weights, change transaction fees, start/stop trading, etc.
Bunicorn has a built-in multi-route smart order process that automatically assigns users’ swap orders to the Flexible pool to get the best price.
The second type is Stable pools
Stable pool in Bunicorn is a special type of AMM pool, which is exclusively customized for stable coins.
Stable pools have several advantages as follows:
- Amplification pools with high capital efficiency
- Due to the high capital efficiency, the trading slippage will be effectively reduced.
- Dynamic fees are applied to optimize the returns of the liquidity provider.
The Bunicorn protocol will facilitate the ability of liquidity providers to adjust the pricing curve of any stablecoin pair using a special “AMP” mechanism. (The technical details of the AMP mechanism can be found in Bunicorn whitepaper. With this mechanism, whenever the number of tokens in the pool changes, the AMP will dynamically adjust and scale up the balance to match appropriately. This means that the Bunicorn protocol can provide better liquidity and slippage compared to other AMMs, given the same liquidity pool and transaction size.
Transaction fees in the stabilization pool are adjusted to market conditions to maximize the return to the liquidity provider and reduce the impact of impermanent losses. During periods of high market volatility, fees will be increased so that profits are retained in the pool to reduce potential impermanent losses to the liquidity provider. And during periods of low market volatility, fees will be reduced to encourage more trading.
An innovative liquidity mining model incorporating NFT
Most liquidity mining platforms suffer from a problem: a single product feature, users are not sticky enough to the platform and tend to immediately dump their tokens mined from the pool, and high APY mining is often accompanied by high inflation of the token supply. To solve this problem, Bunicorn proposes a new solution where they introduce a new liquidity mining model that wraps mining rewards (Vbuni) into NFT. Users can then use these NFTs to convert Vbuni into BUNI tokens after a lock-in period has been unlocked. Also, they can trade/auction these NFTs on other reputable marketplaces.
Bunicorn will rank the rarity of the NFT collection based on the number of assets locked in the NFT. For example, $1 million worth of BUNI tokens will make their NFT Ultra Rare or Super Rare. In addition, Bunicorn will algorithmically design these NFT collectibles to generate unique Bunny characters tailored to them.
The NFTs in the Bunicorn platform differs from other NFTs in that it is similar to a bond with asset tokens with real prices locked inside. In other words, it contains a gaming value. In addition, users can also trade Super Rare assets at a higher premium depending on market conditions. Thus, this feature of Bunicorn achieves 2 goals: to provide a continuous value reward for miners and to separate BUNI from the recurring supply, but still make it liquidatable as NFT assets. Bunicorn is currently developing its own NFT marketplace for users to trade and auction their NFTs.
In summary, Bunicorn did a great job of combining the best of the various AMM platforms on the market and coming up with its own innovative solution based on that. As an early investor in Bunicorn, Krypton Capital and Bunicorn have agreed that we will work together to promote this innovative DeFi x NFT products, expand Bunicorn’s global footprint, and further help foster and deepen the development of the Bunicorn ecosystem to provide users with more user-friendly, high-quality and innovative financial products.
Know more about Bunicorn:
Website: https://buni.finance/
Twitter: https://twitter.com/bunicornswap
Blog: https://blog.buni.finance/
Telegram: https://t.me/bunicornswap_en
About Krypital Group
Founded in 2017, Krypital Group is a leading global venture capital firm and blockchain incubator with active arms in North America, Asia, and Latin America. Vested in a complete blockchain ecosystem, the company has specific investment funds for both primary and secondary markets, as well as providing end to end services such as project incubation, brand management and technical advisory. To date, Krypital Group’s investments and incubated projects are valued at over $1 billion.
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