/biz/ - Business & Finance

if you know, you know.

Barnbridge launched a few weeks ago but hasn't received much attention on /biz/. Here's a quick introduction. Basically, they are looking to make various complex DeFi derivatives. While Synthetix made futures, Hegic made options, Bondbridge will be making collateralised debt obligations and asset backed securities and other interesting stuff.

Here's an example: The interest rate for stablecoins on Aave etc. is currently about 7%. That would be quite an attractive yield for institutions, but it's not a stable yield. With barnbridge, you could bundle up that 7% and break it down into a stable, 5% yielding senior bond for boomer institutions and a riskier, more volatile variable interest rate junior bond that will pay 9% if the Aave rate remains at 7%.

That's a very basic example. Think of some ways this could go:

-A bond based on a uniswap yield farming contract. Senior tranche gets a relatively stable interest rate and no impermanent loss, the junior tranche gets boosted yields and leveraged impermanent loss.
-Lets say LINK staking is earning 30%. This could be broken down into a senior tranche which earns 15% interest and has no LINK exposure as long as it doesnt fall over 50%, and a junior tranche which earns 45% interest and has 2x leveraged exposure to LINK

Remember, all these bonds will be freely tradable ERC tokens, so these will in essence also allow another way to speculate on future volatility and interest rates. This is easily going to be one of the next big money legos, think Aave or Synthetix tier

Barnbridge launched a few weeks ago but hasn't received much attention on /biz/. Here's a quick introduction. Basically, they are looking to make various complex DeFi derivatives. While Synthetix made futures, Hegic made options, Bondbridge will be making collateralised debt obligations and asset backed securities and other interesting stuff.

For those not in finance that sounds like gibberish. Here's an example:

The interest rate for stablecoins on Aave etc. is currently about 7%. That would be quite an attractive yield for institutions, but it's not a stable yield. Barnbridge will be making products that do the following:

1000 USDC deposited on Aave earning 7%. Expected interest in a year at 7% APY: 70 dollars.

This is broken down into a senior tranche and a junior tranche. The senior tranche will be paid 5% no matter what. They get a guaranteed yield, at the cost of giving up 2% yield.

The junior tranche gets the remainder. They get a 2% bump, but take on the interest rate risk.

Say Aave pays 7% for the rest of the year. 7% interest gets paid - 70 dollars. 25 dollars goes to the senior tranche (5%), 45 dollars goes to the junior tranche (9%).

Let's say on the other hand interest rates tank to 0%. The senior tranche still gets 25$ - 5%. That means the junior tranche actually loses money and has to pay the 25$.

On the other hand, if interest rates go to 20% - 200$ on the pool - the senior tranche again gets 25$/5%, while the junior tranche gets 175$/22%

Barnbridge launched a few weeks ago but hasn't received much attention on /biz/. Here's a quick introduction. Basically, they are looking to make various complex DeFi derivatives. While Synthetix made futures, Hegic made options, Bondbridge will be making collateralised debt obligations and asset backed securities and other interesting stuff.

For those not in finance that sounds like gibberish. Here's an example:

The interest rate for stablecoins on Aave etc. is currently about 7%. That would be quite an attractive yield for institutions, but it's not a stable yield. Barnbridge will be making products that do the following:

1000 USDC deposited on Aave earning 7%. Expected interest in a year at 7% APY: 70 dollars.

This is broken down into a senior tranche and a junior tranche. The senior tranche will be paid 5% no matter what. They get a guaranteed yield, at the cost of giving up 2% yield.

The junior tranche gets the remainder. They get a 2% bump, but take on the interest rate risk.

Say Aave pays 7% for the rest of the year. 7% interest gets paid - 70 dollars. 25 dollars goes to the senior tranche (5%), 45 dollars goes to the junior tranche (9%).

Let's say on the other hand interest rates tank to 0%. The senior tranche still gets 25$ - 5%. That means the junior tranche actually loses money and has to pay the 25$.

On the other hand, if interest rates go to 20% - 200$ on the pool - the senior tranche again gets 25$/5%, while the junior tranche gets 175$/22%

Barnbridge launched a few weeks ago but hasn't received much attention on /biz/. Here's a quick introduction. Basically, they are looking to make various complex DeFi derivatives. While Synthetix made futures, Hegic made options, Bondbridge will be making collateralised debt obligations and asset backed securities and other interesting stuff.

For those not in finance that sounds like gibberish. Here's an example:

The interest rate for stablecoins on Aave etc. is currently about 7%. That would be quite an attractive yield for institutions, but it's not a stable yield. Barnbridge will be making products that do the following:

1000 USDC deposited on Aave earning 7%. Expected interest in a year at 7% APY: 70 dollars.

This is broken down into a senior tranche and a junior tranche. The senior tranche will be paid 5% no matter what. They get a guaranteed yield, at the cost of giving up 2% yield.

The junior tranche gets the remainder. They get a 2% bump, but take on the interest rate risk.

Say Aave pays 7% for the rest of the year. 7% interest gets paid - 70 dollars. 25 dollars goes to the senior tranche (5%), 45 dollars goes to the junior tranche (9%).

Let's say on the other hand interest rates tank to 0%. The senior tranche still gets 25$ - 5%. That means the junior tranche actually loses money and has to pay the 25$.

On the other hand, if interest rates go to 20% - 200$ on the pool - the senior tranche again gets 25$/5%, while the junior tranche gets 175$/22%

Barnbridge launched a few weeks ago but hasn't received much attention on /biz/. Here's a quick introduction. Basically, they are looking to make various complex DeFi derivatives. While Synthetix made futures, Hegic made options, Bondbridge will be making collateralised debt obligations and asset backed securities and other interesting stuff.

For those not in finance that sounds like gibberish. Here's an example:

The interest rate for stablecoins on Aave etc. is currently about 7%. That would be quite an attractive yield for institutions, but it's not a stable yield. Barnbridge will be making products that do the following:

1000 USDC deposited on Aave earning 7%. Expected interest in a year at 7% APY: 70 dollars.

This is broken down into a senior tranche and a junior tranche. The senior tranche will be paid 5% no matter what. They get a guaranteed yield, at the cost of giving up 2% yield.

The junior tranche gets the remainder. They get a 2% bump, but take on the interest rate risk.

Say Aave pays 7% for the rest of the year. 7% interest gets paid - 70 dollars. 25 dollars goes to the senior tranche (5%), 45 dollars goes to the junior tranche (9%).

Let's say on the other hand interest rates tank to 0%. The senior tranche still gets 25$ - 5%. That means the junior tranche actually loses money and has to pay the 25$.

On the other hand, if interest rates go to 20% - 200$ on the pool - the senior tranche again gets 25$/5%, while the junior tranche gets 175$/22%

remember when (((bankers))) fucked up the world economy in 2008?
Barnbridge is kinda like that but for crypto
BUY BARNBRIDGE
check em

>anonymous team
>relentlessly shilled on /biz/ by admitted pajeets
>promised mega returns
Yikes
Take the /barnbridge/ pill

FUD or shill BOND to me