$BOND

[Anonymous No.25123948]

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%

[Anonymous No.25123958]

Why is this revolutionary? This allows the creation of complex products geared towards various investors. Boomer institutions can get a safe 5% on their money. Risky punters can get higher yields and bet on interest rates going up, or even borrow money on Aave to buy the senior tranche, thereby betting on rates going lower. The bonds will be ERC-20 tokens, which means they can trade, like bonds do IRL as interest rates move about.

This can be extended in so many ways too. Think bonds that have some exposure to ethereum that transfers the ethereum risk to junior tranches while the senior tranches retain a risk free low interest rate.

Team and advisors? Stani of Aave and Kain of Synthetix. That points towards integration with Aaves money markets and Synthetix derivatives, which could be integrated into Barnbridge's bonds.

Barnbridge is currently in week 10/25 of its yield farming phase. There are huge whales in this with $300m deposited in total. You could farm it but there is only 32,000 divided by $300m. Earlier this week one person deposited $40m. Whales are putting in hundreds of millions to obtain this token. For most people, a better choice will be to buy the token. Currently trading at $30 with a max supply of 10m tokens, for a fully diluted valuation of $300m. This compares to projects like Aave and Synthetix - projects with similar quality teams - with FDV of about $1.5b. BOND can also be staked.

Barnbridge skipped the ICO and went straight for a community distribution. The farming period ends in 15 weeks. So essentially we're in a 25 week long ICO when the price is kept low by farmers. Expect the price to rise when farming ends. Get in now and stake.