What is UniLend (UFT)

UniLend (UFT): A Comprehensive Analysis of the Permissionless DeFi Protocol

UniLend (UFT) represents a pioneering effort in decentralized finance (DeFi), designed to democratise access to financial services by enabling permissionless lending, borrowing, and trading of all ERC-20 tokens. Launched in 2020, the protocol addresses the limitations of traditional DeFi platforms by eliminating centralised control over asset listings and integrating advanced features such as multi-chain operability, AI-driven agents, and a unified gas token system. Governed by its native UFT token, UniLend has evolved through significant milestones, including the launch of its V2 mainnet and strategic partnerships aimed at bridging DeFi with artificial intelligence. This report delves into UniLend’s architecture, governance, historical developments, and ecosystem contributions.

Introduction to UniLend (UFT)

UniLend is a decentralised protocol that combines spot trading, lending, and borrowing functionalities into a single platform. It enables users to interact with any ERC-20 token without requiring permission from centralised entities. Unlike traditional DeFi platforms that restrict listings to a curated set of assets, UniLend’s permissionless model allows any ERC-20 token to be utilised for financial activities, thereby unlocking access to over $300 billion in previously excluded digital assets. The protocol’s native token, UFT, serves as the backbone of its ecosystem, facilitating governance, staking rewards, and cross-chain transactions.

What Is UniLend (UFT)?

Core Objectives and Innovations

UniLend aims to “make every digital asset productive” by providing a foundational layer for decentralised financial services. Its primary innovations include:

1. Permissionless Listings: Users can list any ERC-20 token for lending, borrowing, or trading, empowering communities to participate in DeFi without gatekeepers.
2. Isolated Dual Asset Pools: Users create pools for asset pairs (e.g., ETH/DAI), isolating risk to prevent systemic failures common in cross-collateralised systems.
3. AI Integration: Partnerships with platforms such as DO Network enable the creation of on-chain AI agents that automate DeFi operations, enhancing scalability and user experience.
4. Unified Gas Token: UFT simplifies cross-chain transactions by serving as a universal gas token, eliminating the need for multiple native tokens.

UFT Token Utility

UFT’s functionalities extend beyond governance and include:

• Governance Rights: Holders of UFT have the power to vote on protocol upgrades, fee structures, and asset listings.
• Staking and Incentives: Liquidity providers earn UFT rewards, fostering ecosystem growth.
• Access to AI Tools: UFT grants entry to an AI Agent Hub, where users can deploy automated strategies.

Founders and Leadership

UniLend was co-founded in 2020 by Chandresh Aharwar (CEO), Tarun Malik, and Suryansh Kumar. Aharwar, who previously contributed at the Matic Network (now Polygon), has been instrumental in refining the project’s vision to address DeFi fragmentation. His expertise in tokenomics and blockchain scalability has greatly contributed to UniLend’s technical architecture. The team’s commitment to decentralised governance and multi-chain interoperability is evident in their strategic decision-making processes.

Investors and Funding

In September 2020, UniLend secured $3.1 million in a seed funding round led by notable investors, including Woodstock Fund, Youbi Capital, and AU21 Capital. With participation from leading entities such as 3Commas and Bibox Exchange, these investments validated UniLend’s potential to disrupt traditional lending markets. The funds were allocated toward protocol development, security audits, and ecosystem incentives, ensuring a solid foundation for scalability and innovation.

Technical Architecture and Functionality

Dual Asset Pool Mechanism

UniLend’s innovative isolated pool structure allows users to deposit two assets into a smart contract, from which they can earn interest from the corresponding borrowers. This design effectively mitigates ongoing risks—if one asset depreciates, only its paired pool bears the impact, unlike platforms where all pools are interconnected. Lenders can select pools based on their risk appetite while borrowers are required to post collateral that exceeds the loan values to ensure financial stability.

Cross-Chain Operability

Initially deployed on Ethereum, UniLend has since expanded to other platforms including Binance Smart Chain and Polygon, allowing users to transact across different blockchains seamlessly. This multi-chain approach reduces friction for developers building cross-chain decentralised applications (dApps) while enhancing liquidity sources for users seeking diverse trading options.

AI Agent Hub

A 2024 partnership with DO Network has introduced AI agents that automate various tasks such as liquidity provisioning and arbitrage trading. These agents operate transparently on-chain and are co-owned by UFT holders, thereby reducing reliance on centralised processes and enhancing the protocol’s decentralisation.

Historical Timeline

Key Milestones

• 2020: The protocol debuted on Ethereum; seed funding was secured to facilitate initial developments.
• October 2022: The UFT token was released, granting governance and staking functionalities to holders.
• February 2024: The launch of the V2 mainnet introduced innovative features including isolated pools and concentrated liquidations.
• December 2024: Collaboration with DO Network aimed to integrate advanced AI tools into the ecosystem.

Evolution of Features

• 2021: Flash loans and multi-chain support designed to broaden user engagement were introduced.
• 2023: The user interface (UI/UX) underwent enhancements along with gas cost optimisations to attract mainstream users.
• 2024: The implementation of universal gas token functionality and the establishment of the AI Agent Hub emphasised technological advancement and user convenience.

Ecosystem Impact and Future Directions

UniLend’s permissionless model has expanded DeFi accessibility, particularly for long-tail assets, including liquidity provider (LP) tokens and synthetic derivatives. Its focus on community-driven governance aligns well with the overarching principles of Web3, while the integration of artificial intelligence positions it as a leader in decentralised automation. Looking toward the future, potential developments could include:

• ZK-Rollup Integration: To enhance scalability while minimising Ethereum gas fees.
• NFT Collateralisation: Enabling Non-Fungible Tokens to be used as collateral for loans, broadening the use cases of the platform.
• Decentralised Identity Solutions: Leveraging AI agents for Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance devoid of central oversight.

Conclusion

UniLend redefines the landscape of decentralised finance by merging open access with cutting-edge technologies. Its removal of listing barriers, combined with the multi-functional utility of UFT, cultivates a robust ecosystem for lenders, borrowers, and developers alike. As the protocol continues to advance its AI capabilities and cross-chain infrastructure, it is poised to unlock new opportunities for decentralised finance, ensuring the potential for every digital asset—regardless of market cap—to participate fully in the global financial ecosystem.