diff --git a/crates/ide_assists/src/handlers/extract_function.rs b/crates/ide_assists/src/handlers/extract_function.rs
index 192403b15d..1e21050911 100644
--- a/crates/ide_assists/src/handlers/extract_function.rs
+++ b/crates/ide_assists/src/handlers/extract_function.rs
@@ -1319,7 +1319,7 @@ impl Function {
                     .type_arguments()
                     .nth(1)
                     .map(|ty| make_ty(&ty, ctx, module))
-                    .unwrap_or_else(make::ty_unit);
+                    .unwrap_or_else(make::ty_placeholder);
                 make::ext::ty_result(fun_ty.make_ty(ctx, module), handler_ty)
             }
             FlowHandler::If { .. } => make::ext::ty_bool(),
@@ -1327,7 +1327,7 @@ impl Function {
                 let handler_ty = action
                     .expr_ty(ctx)
                     .map(|ty| make_ty(&ty, ctx, module))
-                    .unwrap_or_else(make::ty_unit);
+                    .unwrap_or_else(make::ty_placeholder);
                 make::ext::ty_option(handler_ty)
             }
             FlowHandler::MatchOption { .. } => make::ext::ty_option(fun_ty.make_ty(ctx, module)),
@@ -1335,7 +1335,7 @@ impl Function {
                 let handler_ty = err
                     .expr_ty(ctx)
                     .map(|ty| make_ty(&ty, ctx, module))
-                    .unwrap_or_else(make::ty_unit);
+                    .unwrap_or_else(make::ty_placeholder);
                 make::ext::ty_result(fun_ty.make_ty(ctx, module), handler_ty)
             }
         };
@@ -1501,7 +1501,7 @@ fn with_tail_expr(block: ast::BlockExpr, tail_expr: ast::Expr) -> ast::BlockExpr
 }
 
 fn format_type(ty: &hir::Type, ctx: &AssistContext, module: hir::Module) -> String {
-    ty.display_source_code(ctx.db(), module.into()).ok().unwrap_or_else(|| "()".to_string())
+    ty.display_source_code(ctx.db(), module.into()).ok().unwrap_or_else(|| "_".to_string())
 }
 
 fn make_ty(ty: &hir::Type, ctx: &AssistContext, module: hir::Module) -> ast::Type {
@@ -4191,6 +4191,29 @@ fn main() {
 fn $0fun_name(bar: &str) {
     m!(bar);
 }
+"#,
+        );
+    }
+
+    #[test]
+    fn unresolveable_types_default_to_placeholder() {
+        check_assist(
+            extract_function,
+            r#"
+fn foo() {
+    let a = __unresolved;
+    let _ = $0{a}$0;
+}
+"#,
+            r#"
+fn foo() {
+    let a = __unresolved;
+    let _ = fun_name(a);
+}
+
+fn $0fun_name(a: _) -> _ {
+    a
+}
 "#,
         );
     }
diff --git a/crates/ide_assists/src/handlers/generate_function.rs b/crates/ide_assists/src/handlers/generate_function.rs
index ad98aa16d8..8feae78126 100644
--- a/crates/ide_assists/src/handlers/generate_function.rs
+++ b/crates/ide_assists/src/handlers/generate_function.rs
@@ -37,7 +37,7 @@ use crate::{
 //     bar("", baz());
 // }
 //
-// fn bar(arg: &str, baz: Baz) ${0:-> ()} {
+// fn bar(arg: &str, baz: Baz) ${0:-> _} {
 //     todo!()
 // }
 //
@@ -342,7 +342,7 @@ impl FunctionBuilder {
 }
 
 /// Makes an optional return type along with whether the return type should be focused by the cursor.
-/// If we cannot infer what the return type should be, we create unit as a placeholder.
+/// If we cannot infer what the return type should be, we create a placeholder type.
 ///
 /// The rule for whether we focus a return type or not (and thus focus the function body),
 /// is rather simple:
@@ -357,14 +357,14 @@ fn make_return_type(
 ) -> (Option<ast::RetType>, bool) {
     let (ret_ty, should_focus_return_type) = {
         match ctx.sema.type_of_expr(call).map(TypeInfo::original) {
-            Some(ty) if ty.is_unknown() => (Some(make::ty_unit()), true),
-            None => (Some(make::ty_unit()), true),
+            Some(ty) if ty.is_unknown() => (Some(make::ty_placeholder()), true),
+            None => (Some(make::ty_placeholder()), true),
             Some(ty) if ty.is_unit() => (None, false),
             Some(ty) => {
                 let rendered = ty.display_source_code(ctx.db(), target_module.into());
                 match rendered {
                     Ok(rendered) => (Some(make::ty(&rendered)), false),
-                    Err(_) => (Some(make::ty_unit()), true),
+                    Err(_) => (Some(make::ty_placeholder()), true),
                 }
             }
         }
@@ -458,7 +458,7 @@ fn fn_args(
                     ty
                 }
             }
-            None => String::from("()"),
+            None => String::from("_"),
         });
     }
     deduplicate_arg_names(&mut arg_names);
@@ -639,7 +639,7 @@ fn foo() {
     bar();
 }
 
-fn bar() ${0:-> ()} {
+fn bar() ${0:-> _} {
     todo!()
 }
 ",
@@ -666,7 +666,7 @@ impl Foo {
     }
 }
 
-fn bar() ${0:-> ()} {
+fn bar() ${0:-> _} {
     todo!()
 }
 ",
@@ -690,7 +690,7 @@ fn foo1() {
     bar();
 }
 
-fn bar() ${0:-> ()} {
+fn bar() ${0:-> _} {
     todo!()
 }
 
@@ -716,7 +716,7 @@ mod baz {
         bar();
     }
 
-    fn bar() ${0:-> ()} {
+    fn bar() ${0:-> _} {
         todo!()
     }
 }
@@ -740,7 +740,7 @@ fn foo() {
     bar(BazBaz);
 }
 
-fn bar(baz_baz: BazBaz) ${0:-> ()} {
+fn bar(baz_baz: BazBaz) ${0:-> _} {
     todo!()
 }
 ",
@@ -763,7 +763,7 @@ fn foo() {
     bar(&BazBaz as *const BazBaz);
 }
 
-fn bar(baz_baz: *const BazBaz) ${0:-> ()} {
+fn bar(baz_baz: *const BazBaz) ${0:-> _} {
     todo!()
 }
 ",
@@ -788,7 +788,7 @@ fn foo() {
     bar(baz());
 }
 
-fn bar(baz: Baz) ${0:-> ()} {
+fn bar(baz: Baz) ${0:-> _} {
     todo!()
 }
 ",
@@ -1091,7 +1091,7 @@ fn foo() {
     bar(Baz::new);
 }
 
-fn bar(new: fn) ${0:-> ()} {
+fn bar(new: fn) ${0:-> _} {
     todo!()
 }
 ",
@@ -1115,7 +1115,7 @@ fn foo() {
     bar(closure)
 }
 
-fn bar(closure: ()) {
+fn bar(closure: _) {
     ${0:todo!()}
 }
 ",
@@ -1123,7 +1123,7 @@ fn bar(closure: ()) {
     }
 
     #[test]
-    fn unresolveable_types_default_to_unit() {
+    fn unresolveable_types_default_to_placeholder() {
         check_assist(
             generate_function,
             r"
@@ -1136,7 +1136,7 @@ fn foo() {
     bar(baz)
 }
 
-fn bar(baz: ()) {
+fn bar(baz: _) {
     ${0:todo!()}
 }
 ",
@@ -1400,7 +1400,7 @@ impl Foo {
         self.bar();
     }
 
-    fn bar(&self) ${0:-> ()} {
+    fn bar(&self) ${0:-> _} {
         todo!()
     }
 }
@@ -1422,7 +1422,7 @@ fn foo() {
     bar(42).await();
 }
 
-async fn bar(arg: i32) ${0:-> ()} {
+async fn bar(arg: i32) ${0:-> _} {
     todo!()
 }
 ",
@@ -1443,7 +1443,7 @@ fn foo() {S.bar();}
 impl S {
 
 
-fn bar(&self) ${0:-> ()} {
+fn bar(&self) ${0:-> _} {
     todo!()
 }
 }
@@ -1465,7 +1465,7 @@ impl S {}
 struct S;
 fn foo() {S.bar();}
 impl S {
-    fn bar(&self) ${0:-> ()} {
+    fn bar(&self) ${0:-> _} {
         todo!()
     }
 }
@@ -1490,7 +1490,7 @@ mod s {
 impl S {
 
 
-    pub(crate) fn bar(&self) ${0:-> ()} {
+    pub(crate) fn bar(&self) ${0:-> _} {
         todo!()
     }
 }
@@ -1523,7 +1523,7 @@ mod s {
 impl S {
 
 
-fn bar(&self) ${0:-> ()} {
+fn bar(&self) ${0:-> _} {
     todo!()
 }
 }
@@ -1546,7 +1546,7 @@ fn foo() {S.bar();}
 impl S {
 
 
-fn bar(&self) ${0:-> ()} {
+fn bar(&self) ${0:-> _} {
     todo!()
 }
 }
@@ -1568,7 +1568,7 @@ fn foo() {S::bar();}
 impl S {
 
 
-fn bar() ${0:-> ()} {
+fn bar() ${0:-> _} {
     todo!()
 }
 }
@@ -1590,7 +1590,7 @@ impl S {}
 struct S;
 fn foo() {S::bar();}
 impl S {
-    fn bar() ${0:-> ()} {
+    fn bar() ${0:-> _} {
         todo!()
     }
 }
@@ -1615,7 +1615,7 @@ mod s {
 impl S {
 
 
-    pub(crate) fn bar() ${0:-> ()} {
+    pub(crate) fn bar() ${0:-> _} {
         todo!()
     }
 }
@@ -1639,7 +1639,7 @@ fn foo() {S::bar();}
 impl S {
 
 
-fn bar() ${0:-> ()} {
+fn bar() ${0:-> _} {
     todo!()
 }
 }
diff --git a/crates/ide_assists/src/tests/generated.rs b/crates/ide_assists/src/tests/generated.rs
index 28f74321da..39ab8c7b74 100644
--- a/crates/ide_assists/src/tests/generated.rs
+++ b/crates/ide_assists/src/tests/generated.rs
@@ -819,7 +819,7 @@ fn foo() {
     bar("", baz());
 }
 
-fn bar(arg: &str, baz: Baz) ${0:-> ()} {
+fn bar(arg: &str, baz: Baz) ${0:-> _} {
     todo!()
 }
 
diff --git a/crates/syntax/src/ast/make.rs b/crates/syntax/src/ast/make.rs
index 5494dd1d3e..93eca19c30 100644
--- a/crates/syntax/src/ast/make.rs
+++ b/crates/syntax/src/ast/make.rs
@@ -95,6 +95,9 @@ pub fn lifetime(text: &str) -> ast::Lifetime {
 pub fn ty(text: &str) -> ast::Type {
     ty_from_text(text)
 }
+pub fn ty_placeholder() -> ast::Type {
+    ty_from_text("_")
+}
 pub fn ty_unit() -> ast::Type {
     ty_from_text("()")
 }