Quickstart

This section is your gateway to mastering the Unrekt platform, offering a detailed guide on how to navigate through the User Roles, Financial Calculation Model or Income & Earnigs. Whether you're looking to sell your locked liquidity pools, invest in existing ones, or trade with them, we've got you covered.

Liquidity Seller

A Liquidity Seller on the Unrekt platform is an individual or entity that lists their locked liquidity pool for crowdfunding. They set a financial goal for the sale and, upon successful funding, benefit from immediate liquidity paying a small fee to the Unrekt ecosystem.

Example

John has 10 ETH in a locked liquidity pool, inaccessible for a year. Facing an urgent expense, he needs 6 ETH now. He lists his liquidity on Unrekt as a Liquidity Seller for 8 ETH—a 20% discount. This attracts buyers looking to earn a 20% return in ETH when the pool unlocks. Once successfully funded, John immediately receives 8 ETH, deducting a 2% fee (0.16 ETH) for Unrekt. This solution swiftly resolves his liquidity issue, while buyers will secure a 20% gain on their ETH investment.

Liquidity Buyer

A Liquidity Buyer is a participant who contributes to the funding of liquidity pools. They invest with the potential to receive a proportional of the total liquidity upon the locked pool's release, with the security of a refund if the crowdfunding doesn't meet its goal.

Example

Peter aims to increase his ETH holdings in the medium term with minimal risk and finds a locked liquidity pool on Unrekt that will be released in 180 days. With 1 ETH locked and available for 0.6 ETH, it promises a 40% gain. When investing, Peter is aware that he will receive a return higher than his initial investment once the pool is released, with the security of a refund if the crowdfunding goal is not met. Although he intends to hold for the long term, he values the option to sell in the secondary market for potential profit and liquidity.

Liquidity Trader

A Liquidity Seller on the Unrekt platform is an individual or entity that lists their locked liquidity pool for crowdfunding. They set a financial goal for the sale and, upon successful funding, benefit from immediate liquidity paying a small fee to the Unrekt ecosystem.

Example

Emily acquires a liquidity position on Unrekt that was sold in advance by another user for 0.5 ETH, with an expected final value of 1 ETH upon unlocking. She holds onto the position for a period and then sells it for 0.75 ETH. With this strategy, Emily achieves a profit of 0.25 ETH without needing to wait for the complete unlock, taking advantage of the position's value increase as the release date approaches to optimize her gains.

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Financial Calculation Model

To model the initial price of a liquidity pool position that will be unlocked in $X$ days with a future value $Z$ at unlock, we can consider several factors, including the expected rate of return $R$ that buyers are looking for, the time value of money, and potentially the risk associated with the wait until the liquidity is unlocked. A simple way to approach this is to use a discounting method where the future value $Z$ is discounted back to its present value $P_\text{initial}$ based on the expected annual rate of return $R$ and the time in years $T$ until the unlock. Given that $X$ days needs to be converted into years for this calculation, we use $T = \frac{X}{365}$

The formula to calculate the initial price $P_\text{initial}$ would be:

   $P_\text{initial} = \frac{Z}{(1 + R)^T}$

Breaking down the formula components:

   $P_\text{initial}$ is what we want to calculate, the initial price of the pool.
   $Z$ is the known future value of the pool at the time of unlock.
   $R$ is the annualized expected rate of return, expressed as a decimal (e.g., 5% would be 0.05).
   $T$ is the time from now until the pool unlocks, expressed in years ($T = \frac{X}{365}$, in case $X$ is days).

Here is an specific example:

   $Z$ = 10 Ethers
   $X$ = 180 days
   $R$ = 40%

We'll calculate initial $P_\text{initial}$ for the previous values; To start, let's convert $X$ to years $T$:

   $0.4931 = \frac{180}{365}$

Then we calculate $P_\text{initial}$ following the corresponding formula:

   $8.47 Ethers ≈ \frac{10}{(1 + 0.4)^0.4931}$

As we can see in the previous example a higher expected rates of return result in a lower initial price, making the investment more attractive to buyers while potentially less so for sellers. The market dynamics between buyers' desired returns and sellers' willingness to offer their liquidity at those rates determine the actual initial price $Pinitial$.

 

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Income & Earnings

When a Liquidity Provider lists a Liquidity Pool for sale, a crowdfunding is initiated with a financial goal set by the pool's owner. If the goal is met and funds are raised, Unrekt charges a 5% commission on the collected funds. Otherwise, no commission is charged and the sale is canceled.