UA

UA is an ERC20 token used as Increment's "Unit of Account" with a fixed price of 1 USD. It is used to settle all profits or losses generated from market operations (trades/liquidity provision/liquidations).

Anyone can mint UA by depositing an equivalent amount of USDC (currently the sole reserve token).

Traders can use their UA balances as collateral to open/extend trading positions. LPs can use it to provide liquidity. However what makes UA special compared to other allowlisted collaterals (which can also be used to open trading positions and provide liquidity) is that, as hinted to earlier, all PnL operations are settled in UA.

If trader Alice opens a position using ETH as sole collateral (assuming ETH is a supported collateral), her ETH collateral won't be affected by the PnL generated. If she makes a profit, she will accrue a UA balance. If she generates a loss, she will accrue a UA debt.

Users can't withdraw their collateral if they have outstanding UA debt (arising from a loss). In such a case, they have no other choice but to first deposit a UA amount in the protocol large enough to cover their UA debt. In turn, this will unlock their collateral and allow them to withdraw their balances from the Vault.