Learn About Oasis Earn G-UNI Product

What is G-UNI Multiply? 

G-UNI Multiply is an Earn strategy that allows you to get high exposure to trading fees from an Uniswap v3 DAI/USDC LP position. 

How does it work? 

G-UNI Earn takes an Uniswap v3 DAI/USDC LP and uses it as collateral in the Maker Protocol to get more Dai. This Dai is deposited back into the DAI/USDC position to get more trading fees.

For example, for a user starting with 50,000 Dai, the following will happen under the hood:

  1. Around 2.5 million Dai will be borrowed from the Maker Flash Mint module
  2. A portion of this loan will be traded for USDC using Maker PSM
  3. Both Dai and USDC will be deposited into Arrakis Uniswap v3 DAIUSDC 
  4. The LP tokens obtained will be locked as collateral in a Vault, and will be used to generate enough Dai to repay the flash loan amount.

What are the differences between G-UNI vs a standard borrow vault? 

Using a standard Vault, you can both generate Dai and withdraw collateral, but this is not possible with G-UNI. This is because the G-UNI vaults are a position to maximize the fees that are collected from Uniswap v3. So, the available actions for the G-UNI vault are to deposit Dai and multiply to the maximum possible amount, and then close the position back to Dai. 

Why is GUNI Earn a unique product? 

  • Low risk - liquidations are disabled
  • No Impermanent loss - Dai and USDC trade close to one another
  • Safer than alternatives - higher 90 day return than simple deposits into lending protocols

What are the risks?

As always, there are risks to consider when involving in this product:

  • Low returns: no guarantee of returns, low volume could make the position unprofitable.

Collected fees from the Uniswap V3 position depend entirely on the volume that passes through that pool and as such is a variable return that’s reliant on market conditions and the ratio between liquidity and volume of the pool

  • Negative returns: if the fee paid to the Maker protocol is too high, the position will be at a loss

Read more about Oasis.app security here. Learn more about G-UNI here.

November 4, 2022

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