An Introduction to Bunicorn

Market landscape

DeFi has gained massive adoption recently with a wide range of applications such as Decentralized Exchange (DEX), Stablecoins, Lending platforms, Liquidity Mining, etc. The market cap has reached over $120B on 15th April 2021 as recorded in Dune Analytics.

One of the most notable contributions to this growth is the evolution of DEX in the past 4 years. The first several approaches were simulating a centralized exchange with off-chain relay and on-chain settlement such as the order book-style introduced by 0x.org. Kyber took a slightly different approach by having smart contract-based reserve aggregation that allows large liquidity providers (LP) to connect and advertise prices for specific trade pairs. As a countermeasure, these concepts usually have some (centralized) control mechanisms such as the whitelisting of the LPs or having Oracles to feed prices to the smart contracts.

Then, the Auto Market Making (AMM) concept initially introduced by Bancor (2017) & Uniswap (2018) has been proven viable allowing fully on-chain autonomous market-maker and gained exponential adoption in combination with liquidity mining. Uniswap’s volume even surpassed the giant centralized exchange Coinbase.

The evolution has been continued with several proposals to improve many aspects of AMM including reducing the impermanent loss, lower the slippage, avoid front-running, and improving capital efficiency by many projects such as Balancer, Curve, Mooniswap, Kyber DMM… Each of them has different benefits and tradeoffs.

The Bunicorn exchange

There are some problems associated with other DEXs. Let’s discuss those in a short way.

  • Most of the DEXs support only two tokens per liquidity with 1:1 ratio. You should have two tokens with the same market value to become a liquidity provider. This often comes with a high risk of impermanent loss because half of your portfolio is exposed to a high volatile token.
  • Traders usually suffer slippage which is not suitable for swapping stable coins due to limited liquidity.
  • High gas fees and low speed in ETH.
  • Users tend to dump the tokens they get from yield farming immediately when they get the mining reward.

Looking at all the aforementioned concerns, we made an effort to combine the best solutions of existing AMM platforms into a single seamless UI that addresses all of the problems above.

What is Bunicorn?

Bunicorn is an automated market-making decentralized exchange currently on the Binance Smart Chain network that supports 2 kinds of liquidity pools:

  • Flexible pools with up to 8 tokens, any weight
  • Stable pools with super low slippage & high capital efficiency for stablecoins

In addition to DEX, Bunicorn also offers high APY liquidity mining farms with a new NFT reward vesting model.

Before getting deeper into two kinds of pools in Bunicorn, let’s take a sneak peek of our gamified user interface:

Flexible pools

Bunicorn flexible pools are modeled after the concept of N-dimensional invariant surface AMM proposed by Balancers. Each pool contains the two or more tokens and each must have the independent weight. The weight of the token in each pool represents its proportion of the total pool value.

Liquidity providers can also join a multi-token pool with a single asset.

There are two types of Bunicorn flexible pools:

  • Shared Pool: anyone can add or remove the liquidity and swap tokens in the pools.
  • Smart Pool: pool creator can change 6 different parameters like Change Tokens, Change Weight, Change Swap Fees, Start/Stop Trading.

It also has a built-in smart order router that automatically splits your swap across flexible pools for optimized price.

Stable pools

A Stable pool in Bunicorn is a special type of AMM pool that only works for stablecoins. There are several advantages of a Stable pool:

  • Amplified pools with extremely high capital efficiency
  • Lower trade slippage due to high capital efficiency.
  • Dynamic fees to optimize returns for liquidity providers.

Bunicorn protocol will facilitate liquidity providers with the ability to adjust the pricing curves of any stablecoins pair using a special amplification factor also known as ‘AMP.’ Whenever there is a change in token numbers in the pool, AMP will dynamically adjust and amplify the balance to match appropriately. This means that given the same liquidity pool and trade size, Bunicorn protocol can provide much better liquidity and slippage compared to other AMMs.

Fees are adjusted based on market condition to maximize returns for liquidity providers and reduce the impact of impermanent loss. During high market volatility, fees will increase to capture more profit for liquidity providers. Traders who trade in such volatile markets will receive fewer tokens than average, as the profit is kept in the pool to reduce potential impermanent loss for liquidity providers. During low market volatility, fees decrease to encourage more trading and volume.

Liquidity Mining

Liquidity mining is a result of yield farming. The process involves getting tokens as a bonus besides the usual returns. Currently, there are 2 ways to earn our free governance token (BUNI):

  • Stake BUNI, earn BUNI via our first BUNI pool. In the future, you can stake BUNI to earn more kinds of tokens as we’re onboarding new token teams to the platform.
  • Stake BPT (Buni Pool Token), earn BUNI. BPT is what you get after you provide liquidity to an AMM pool.

However, there is one issue with most of the liquidity mining platforms: users tend to dump their tokens they get from the mining pool immediately because that’s not something they bought but something they are given. Also, a high APY yield farming program also comes along with a high inflation rate of the token supply. We have been observing this for quite a long time and wanted to propose a solution that can lock up these farming rewards out of circulation while still providing value to liquidity miners.

To address this problem, we introduced a new liquidity mining model by wrapping up farming rewards (VBUNI) into NFT collectibles. Users can then use these NFT to convert VBUNI into the actual BUNI tokens after a vesting period. In the meantime, they can also trade/auction these NFT in other well-known marketplaces.

NFT Collectibles

We will rank the rarity of the NFT collectibles based on the number of underlying assets wrapped in that token. For instance, a $1M worth of BUNI token will make it Ultra Rare or Super Rare. Apart from that, we will also add tailored-made designs as well as a unique algorithmically generated Bunny character to these NFT collectibles similar to what Crypto Kitty or Polkamon has done so far.

The difference between the NFT in our platform compared to other platforms is that it contains actual time-locked tokens similar to a bond. In other words, it contains a speculative value. If someone cannot wait until the vesting period to be finished, he can sell his NFT at a discount. Besides, he can also collect and resell his Super Rare asset at a price much higher than the underlying BUNI value in other NFT markets. Therefore, we have reached 2 goals for this feature: separating BUNI from the circulating supply but still making them liquidable in the form of NFT assets.

We are working on our own NFT marketplace for users to exchange and auction their NFT to be released in the next phase.


Roadmap

Q2/2021 — Launching

  • Flexible pools for BEP20 tokens.
  • Stable pools for stablecoin.
  • Yield farming tool with NFT Vesting rewards.

Q3/2021 — Acceleration Phase

  • NFT collectibles and marketplace.
  • Mining pools.
  • Governance 1.

Q4/2021 — Moon Phase

  • Mobile application.
  • Exchange listing.
  • Governance 2 + Token Burning.

2022 — Mars Phase

  • Synthetic Swap.
  • Derivatives.
  • Polkadot bridge via Polkafoundry

Learn more

Twitter: https://twitter.com/bunicornswap

Telegram Chat: Telegram: Contact @bunicornswap_en

Telegram Annoucement: Telegram: Contact @bunicornswap

Website: https://buni.finance/

Testnet app: https://staging.buni.finance/