Intro to The UNIT Docs

Documenting The UNIT Development

These docs are designed to describe the details of The UNIT project and present the steps toward our ultimate mission: Unite & Build.

What is UNIT?

UNIT(Ø) is an unbiased unit of account created from a set of cryptocurrencies coming from an Open Selection Criteria and glued together through an Open Algorithm.

UNIT(Ø) is designed to be the Ruler of DeFi, helping all participants to price with long-term stability. Apart from being an Indexed Unit, UNIT(Ø) also serves as the basis for the development of a long-term flat coin that following this benchmark acts as a long-term stable asset.

Why do we need UNIT?

DeFi/Crypto/Web3/Blockchain is a whole new era. Coming into this exciting space we often see ourselves surrounded by noise from the greatest next projects. However, we don't always want to expose ourselves to great losses or invest all of our time in cryptocurrency.

UNIT as an index allows people to follow the entire crypto market, and invest in the space as a whole, instead of in some individual projects. UNIT also takes away the stress of managing our crypto portfolio, freeing us up to concentrate on other crucial and meaningful tasks.

Moreover, Satoshi's concept of decentralized digital currency challenges the traditional government-controlled monetary system. Yet, why do we still rely on government currencies to evaluate our wealth? With its centralization and perpetual inflation, fiat currency is losing its capacity to serve as a value measure in crypto, and the increasing fragmentation in the space is impeding crypto's growth and adoption.

UNIT as a crypto-based unit of account also addresses this issue by creating the most accurate, fully decentralized valuation system based on the market cap of top cryptocurrencies. This not only liberates us from government wealth control but also symbolizes our collective participation in value creation and control.

How does UNIT compare to fiat financial products?

S&P 500 vs. UNIT (Index/Index Fund)

The S&P 500 is the leading index of companies in the world, it contains the top 500 companies in the USA. It’s also the most followed benchmark by index funds; index funds such as BlackRock’s SPY and Vanguard’s VOO have over 1T USD following the index. The S&P 500 index is issued and managed by S&P Global, and they license their index and charge index funds a percentage of their AUM. In contrast, UNIT as an index of cryptocurrencies allows funds to follow it without a fee or a license. Our UNIT vaults also allow participants to hold the index and trade coins against it without fees. The UNIT ETF (TINU) is responsible for these features and others such as the ability to use leverage through flash loans to trade Bitcoin dominance and the market share of many cryptocurrencies. This way UNIT and its ETF offer a wide variety of tools to hold the UNIT benchmark and hedge coins against it.

S&P 500 vs. UNIT

SDR vs. UNIT (Indexed Unit)

The SDR (Special Drawing Rights) is an international reserve asset. It is the unit of account for the International Monetary Fund (not a currency). Its value is based on a basket of five currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling, which are reviewed by the IMF every five years.

On the other hand, UNIT is a unit of account representing a basket of leading cryptocurrencies. It is designed to be a stable and reliable reference for the valuation, trading, and settlement of crypto assets. Like SDR, UNIT aims to provide a global standard for the cryptocurrency market, enabling more stable, decentralized, and unbiased transactions.

SDR vs. UNIT

UF vs. UNIT (Unit of Account/Flatcoin)

There’s another ‘currency’ in Chile other than the Chilean Peso. It’s called Unidad de Fomento, or UF. To be clear, UF isn’t an actual currency.

UF is a store of value, it constantly adjusts with inflation. In other words, one UF today will buy you as many loaves of bread and gallons of gasoline as it bought five, ten, or fifteen years ago. This way, you can ensure that the purchasing power of your savings is preserved.

This is an innovative idea born from Chile’s own experience with hyperinflation several decades ago, and it should be accessible not only to Chileans but to everyone.

The UNIT agrees with UF in allowing people to count in real value and hold their purchasing power, in the UNIT’s case, hold purchasing power in the crypto space. While having the same essence of being a unit of account that is not a currency, the UNIT can now grow without borders thanks to the openness and decentralization in the cryptocurrency space. The UNIT eliminates the difficulties with UF’s high entry barrier, permissioned use, and central control over its algorithm. By replacing centralization with decentralization, we gain a more accurate, unbiased, and accessible unit of account for DeFi.

UF vs. UNIT