The ecosystem of Upfront Protocol focuses on developing two main products: Upfront Staking and UpDEX - the most advanced decentralized exchange.
1. Upfront Staking
The current main issues with the traditional staking mechanism are:
Some stakable assets come with locked periods during which you cannot access your staked assets. Tron and Cosmos would be examples of this.
If the price of your staked asset drops substantially and you cannot unstake it, that will affect your overall returns.
Staking assets without a lockup period would be a way to mitigate lockup risk.
Similar to lockup periods, some staking assets don’t pay out staking rewards daily. As a result, stakers have to wait to receive their rewards.
This shouldn’t affect your APY if you “HODL” and stake the entire year. However, it will reduce the time that you can re-invest your staking rewards to earn more yield (either by staking or by deploying assets in DeFi protocols).
To mitigate the negative effects of long reward durations on your overall crypto investment returns, investors can choose to stake assets that pay daily staking rewards.
Liquidity — or rather the illiquidity — of the asset you are staking is another risk factor to be aware of.
If you are staking a micro-cap altcoin that barely has any liquidity on exchanges, you may find it difficult to sell your asset, or to convert your staking returns into bitcoin or stablecoins.
Staking liquid assets with high trading volumes on exchanges can mitigate liquidity risk.
Recognizing these issues, Upfront Protocol has developed the upfront stake mechanism, which allows users to earn interest before the maturity date, unlock their funds anytime, and focuses only on three main tokens with high liquidity on the market (BNB, USDT, UP Token).
2. UpDEX - Ultimate Decentralized Exchange
With some algorithmic improvements, UpDEX combines CLMM and Ve(3,3) on the same decentralized exchange, providing more benefits for all traders, liquidity providers, and token holders.