INSERTING and REPLACING Umee Launches UDX to Fuel First Ever DeFi-Native Yield Curve

Umee’s Term Structure of Interest Rates will Provide the Cornerstone for Sustainable Global Debt Markets on Decentralized Blockchain Architectures

NEW YORK, September 27, 2022--(BUSINESS WIRE)--Insert after first paragraph: Each loan issued by the DAO has its own loan-specific blockchain. The chain acts as a special purpose vehicle for underwriting the loan directly into the blockchain ecosystem. These loans will be IBC (Inter‑Blockchain Communication Protocol) compatible and can interact with all Cosmos chains and IBC-connected chains. IBC transactions in and out of the chain will also give indication of cash flows in and out of the chain, showcasing financial efficacy of the loan-specific chain. The Chain acts as a public ledger of the health of the loan, equivalent to the way in which quarterly statements show the financial health of the company. This information is beneficial for verifying the health of each loan through total value locked recorded on-chain.

The updated release reads:

UMEE LAUNCHES UDX TO FUEL FIRST EVER DEFI-NATIVE YIELD CURVE

Umee’s Term Structure of Interest Rates will Provide the Cornerstone for Sustainable Global Debt Markets on Decentralized Blockchain Architectures

Umee, a cross chain DeFi hub that has raised nearly $40 million to enable seamless cross-chain borrowing and lending, today announced the launch of UDX, its institutional lending DAO. UDX addresses fundamental flaws in DeFi lending markets while leveraging the benefits of blockchain technologies and, most importantly, offers a blueprint for the wholesale migration of the $200 trillion global debt markets to Web3 with the first-of-its-kind framework for fixed term lending. The new lending DAO supports loans of Proof of Stake assets staked on Cosmos, Ethereum, Avalanche, Near, and Solana. While the Umee Blockchain is the backbone of borrowing and lending activities in Cosmos and throughout, UDX offers an institutional layer that will enable the broader world to adopt crypto.

Each loan issued by the DAO has its own loan-specific blockchain. The chain acts as a special purpose vehicle for underwriting the loan directly into the blockchain ecosystem. These loans will be IBC (Inter‑Blockchain Communication Protocol) compatible and can interact with all Cosmos chains and IBC-connected chains. IBC transactions in and out of the chain will also give indication of cash flows in and out of the chain, showcasing financial efficacy of the loan-specific chain. The Chain acts as a public ledger of the health of the loan, equivalent to the way in which quarterly statements show the financial health of the company. This information is beneficial for verifying the health of each loan through total value locked recorded on-chain.

"Umee’s mission is to bring the world’s bond markets into DeFi where they will take advantage of a fundamentally more efficient, more secure technology platform," said Brent Xu, CEO of Umee. "As the Institutional Lending DAO for Umee, UDX will accelerate the transformation of debt markets by replacing faulty legacy debt primitives with new instruments based on transparent, open source blockchain technology. With accelerating institutional interest for credit opportunities in crypto, UDX is well positioned to build the foundation for this rapidly growing market."

With UDX, Umee begins the essential process of integrating proven debt market fundamentals that are currently missing in DeFi borrowing and lending. Global credit markets price debt with interest rates based on the time value of money and the credit worthiness of borrowers, and UDX applies these same fundamental capital market tools to support more robust pricing of credit risk in crypto markets and addresses major deficiencies brought to light in the many recent high-profile lending failures.

Ultimately, UDX will allow asset holders to contribute assets previously staked on Cosmos, Ethereum, Avalanche, Near, Solana and others to UDX lending pools supporting fixed term credit based on multiple durations. Just as in traditional markets, UDX’ blockchain-based lending rates will be based on time to maturity and borrower creditworthiness. Borrowers will repay principal plus interest on loans they received, denominated in multiple structures including using the borrowed tokens, proof of stake assets, or $UMEE while lenders will benefit from the composability of open source web3 technology.

"The collapse of Terra, Celsius, and other DeFi protocols shows us how precarious the current DeFi landscape is," said Ming Duan, COO of Umee. "By introducing a term structure of interest rates to crypto, Umee is bringing a proven risk assessment tool to DeFi, which will ultimately generate a robust Web3 debt market ecosystem."

About Umee:
Umee is a Cosmos-based decentralized finance hub supporting a suite of composable debt primitives that will enable the next generation of global debt markets connecting borrowers and lenders across all crypto ecosystems. To learn more, visit umee.cc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220927005250/en/

Contacts

Gianna Perera
umee@wachsman.com