💡Our Proposition
Buying locked liquidity is a relatively new concept in DeFi which can offer benefits to both buying and selling parties. The concept behind trading locked liquidity derives from the fact that investors only deem it 'safe' to invest in projects if the underlying liquidity is locked for a significant period of time. Developers use services like UniCrypt to lock the initial liquidity pool, often for 6 to 12 months. This means that, even if a project dies, or comes to an end before the locking period, the developer cannot access the underlying Crypto he or she used in first instance to back the Liquidity Pool. This hinders the so called 'working capital' of the developer and can stop him from taking advantage of new opportunities. This problem is where Liquify comes in. With our platform, developers can sell their locked liquidity. Essentially, we provide three features to our platform, as detailed below. Selling Locked Liquidity: Developers/Project Owners can sell their locked liquidity - essentially transfering the 'lock ownership' to someone else, after an agreed payment is made. Buying Locked Liquidity: Individuals can buy locked liquidity - essentially acquiring the 'lock ownership' from a developer, after an agreed payment is made. Trading Locked Liquidity: Buying locked liquidity from a developer with the intent to sell it to another investor at a higher price, for example when the expiration date comes closer. Locked liquidity is often sold at a discount. This is because buyers have to wait for their money to unlock, and developers essentially pay a fee to buyers to get their money earlier. There are several benefits tied to both buying and selling liquidity. For example, selling parties unlock liquidity to take advantage of new opportunities, whereas buyers can effectively earn the difference between the agreed price and the total value of the locked liquidity. Moreover, buyers and traders could think the price of Ethereum or other underlying Crypto's will go up over the expiration date, essentially multiplying their profits. Please note that, as of 7 May 2024, we only accept Ethereum LP listings on UniCrypt. Shortly after launch, we will add compatibality to other platforms (i.e. Team Finance) and other Cryptocurrency chains (i.e. BNB Smartchain). The next chapter of this Whitepaper, Marketplace, details a guide on how to buy and sell locked liquidity through our platform.
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