Introducing Unipilot v2

3 min readMar 24, 2022

Find out what’s new with Unipilot v2!

The Journey So Far

Unipilot launched in November 2021 as a concentrated liquidity management protocol built on top of Uniswap V3, designed to intelligently optimize liquidity in order to maximize returns and simplify the entire process for LPs.
Over the following months, we learned about areas of the protocol that could be improved, from the strategy to the gas costs, and so we got to work building out a fully upgraded protocol that would position us well to become the go-to platform for liquidity optimization.

As a result of this work, we can today officially introduce Unipilot v2, which delivers the following new features:

Auto Compounding

With auto compounding, liquidity providers’ earned fees will be moved back into their active liquidity position in order to compound their capital and further boost earned fees.
Auto compounding will occur whenever there is a rebase or anyone withdraws from the pool. When using Uniswap v3 alone, fees are not compounded and instead sit idle.

Lower Gas Fees

High Ethereum network gas fees have been a hurdle to the growth of the DeFi space, and we knew something had to be done to help lessen the impact to users of Unipilot.
Switching from NFT to LP token-based architecture alongside other optimizations has significantly reduced gas fees when interacting with the protocol. Our tests showed an average reduction in gas fees of -60% compared to Unipilot v1.

Active Liquidity Management

The Unipilot protocol will itself actively manage the liquidity positions of the top 25 pairs by TVL on Uniswap v3. These pools will be fully rebalanced by the Unipilot protocol with each rebase, which will remove the issue of distorted ratios which led to capital being sent straight to earned fees.
Other pairs will remain under the same passive liquidity management used in Unipilot v1, with captains rebasing pools when necessary. However, the rebalancing feature has been adjusted to allow for a greater portion of assets to be swapped when the position is moved back into range, to minimize the issue of imbalanced ratios.

Layer-2 Solutions

Unipilot v2 is compatible with all three of the layer-2 solutions on Uniswap v3: Optimism, Arbitrum, and Polygon. We will be adding support for these solutions one by one in the coming weeks.
This will expand our total addressable market and allow you to interact with Unipilot while avoiding the high gas fees on Ethereum L1.

Improved Strategy

We conducted a full month of backtesting of fees earned on Unipilot v2 vs. Uniswap v3. The results showed that Unipilot outperformed across all pairs tested, with for example 3.3x higher fees on WBTC/ETH and 2.9x higher fees on DAI/ETH!
We will release a full breakdown of the results of this study in a separate article soon.

Dual Liquidity Mining

The new farming contracts allow for dual liquidity mining, which means that LPs in a specific pool can earn farming rewards in more than one token at a time.
You’ll be able to participate in dual liquidity mining soon when our first partnership on v2 is announced!

“Wen Launch?”

Soon. Keep an eye out for the announcement!
At launch, users of Unipilot v1 will be able to migrate their liquidity to v2 with the click of a button. Gas fees for this will be refunded using $PILOT tokens.
The $PILOT token does not change as a result of the upgrade.

Let’s make 2022 the year of the PILOT!

With the launch of Unipilot v2, we are now well-positioned to push ahead with our goal of reaching a TVL of at least $500m, which would be tremendous for the growth of the index fund.
To help us achieve this, we will be working on partnerships and ramping up marketing and growth initiatives such as referral programs and claim drops to encourage more LPs to migrate to Unipilot. We also have big ambitions to expand the protocol, for example by introducing support for bonding and loans! We hope you stick with us on this exciting journey that is only just beginning!

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Written by A51 Finance