Hey guys :) I’m back with another comprehensive Q&A piece, this time for the newly launched and highly anticipated DeFi protocol – BarnBridge (BOND).
BarnBridge is a tokenized risk protocol that exists to help facilitate the transition of yield and yield-based derivatives from less efficient centralized systems to more efficient decentralized financial systems.
Now, before we dive in, the following piece is similar to my latest articles on Celsius (CEL), Serum (SRM), and Kleros (PNK), so if you haven’t already seen those, be sure to check them out as well.
Hope you enjoy!
The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:
- What is BarnBridge Protocol?
- Who and When Created BarnBridge?
- What is the $BOND Token used For?
- What are the Main Products of BarnBridge?
- How is BarnBridge Governed?
- Where to Store $BOND?
- Where to Buy & Sell $BOND?
1. What is BarnBridge Protocol?
BarnBridge website homepage
BarnBridge is a tokenized risk protocol that will help facilitate the transition of the $244 trillion in debt and yield-based derivatives from less efficient centralized financial systems to more efficient decentralized financial systems.
This migration of money is poised to be one of the largest movements of wealth in human history and:
“BarnBridge exists to help facilitate this transition and make the decentralized financial system more efficient, risk-flexible, and attractive to a wider range of participants.”
The team at BarnBridge believes that more and more types of loans will move to decentralized ledgers (ie. Ethereum blockchain technology) due to its lower cost, higher efficiencies, and higher yield opportunities than current centralized third-party intermediaries.
When this happens, there will be a greater opportunity for more yield, more risk ramps, and higher CD-like (collateralized debt) products for fiat and crypto depositors.
Now, to help facilitate this movement of wealth ($244 trillion of debt and yield-based derivatives) from the traditional financial system to the decentralized financial system, BarnBridge has developed the first fluctuations derivatives protocol for hedging yield sensitivity and market price.
The way it works is:
The BarnBridge protocol reduces the risk of digital assets & digital asset yield sensitivity by breaking them into tranches; which are essentially infinite, separate, dollar-denominated chunks; and then developers build derivatives off these tranches.
By doing this, the BarnBridge protocol aims to mitigate risk and offer layered risk management to both decentralized finance (DeFi) and traditional finance (TradFi) investors by building more efficient debt & yield based derivatives.
All in all, the BarnBridge protocol aims to bring familiar TradFi instruments to the DeFi ecosystem and is potentially a critical piece of infrastructure that will foster the growth and success of DeFi.
2. Who and When Created BarnBridge?
BarnBridge founder, Aaron McDonald
BarnBridge was founded by Aaron McDonald, who first started the project in early August 2020 when he messaged Kain Warwick founder of Synthetix, and pitched his idea for BarnBridge.
(Kain Warwick’s Twitter thread on BarnBridge origin story)
Kain took Aaron’s message very well and was super interested in his idea so he instantly said “I would 100% fund it.” 1 hour later, Aaron replied to Kain telling him he would put together a team to execute it.
Then just a few days later Kain was invited to jump on a call with an impressive team Aaron had rounded up for the project. Things quickly took off from there and Kain asked how much funding they needed from him and to his surprise, Aaron had told him not to worry, the project was entirely self-funded up to launch.
After a few weeks, the BarnBridge project launched and had over $100m TVL in the contracts before the start of the distribution. It was a major success at birth.
So, how is it that Aaron McDonald was able to create and deploy a massively successful project in 3-4 weeks? Who is he?
Let’s dive in.
Aaron McDonald is a tech industry veteran with 20 years of experience leading teams across all aspects of a technology company and has managed portfolios over $1b in value.
Prior to BarnBridge, Aaron founded Centrality; a leading $100m global venture studio that leverages decentralized technology to create new market innovation and customer experiences.
He’s also a board member or advisor to more than a dozen venture companies around the world and in 2018, Aaron was awarded EY Entrepreneur of the Year for the technology and emerging industries category.
Needless to say, Aaron has made a name for himself in the tech industry and is now building out critical infrastructure for the DeFi space with BarnBridge.
BarnBridge Core Team & Co-Founders
BarnBridge co-founders, Troy Murray and Tyler Ward
Joining Aaron in co-founding BarnBridge are two incredibly talented technologists, Troy Murray and Tyler Ward.
Both Troy and Tyler are highly respected pioneering developers in the Ethereum ecosystem with experience working with Consensys, Grid+, Centrality, DARMA Capital, SingularDTV/Breaker, and more.
In addition to these brilliant co-founders, the BarnBridge core team is joined by Milad Mostavi, Dragos Rizescu, and Bogdan Gheorghe.
3. What is the $BOND Token used For?
BarnBridge (BOND) token logo
$BOND is the native ERC-20 cryptocurrency token of the BarnBridge protocol. $BOND will be used to stake in the system, and as a governance token when the governance module is launched with the BarnBridgeDAO.
The BarnBridgeDAO will be the Decentralized Autonomous Organization (DAO) that is controlled by the $BOND token holder community. This DAO will have full control over the protocol and the features that are built into it. $BOND token holders will have the right to vote on protocol changes, upgrades, and proposals.
$BOND Token Stats & Distribution
The total supply of $BOND tokens is 10,000,000 BOND and the token distribution is as follows:
- 60% Community
- 8% Yield farming
- 12.5% Core Team
- 7.5% Investors
- 10% DAO Treasury
- 2% Advisors
The $BOND token distribution is designed to facilitate the most decentralized protocol and ensure that power doesn’t reside in the hands of a few.
As for the tokens allocated to the Founders, Seed Investors, and Advisors, they are locked in a smart contract and are released on a weekly basis over two years.
4. What are the Main Products of BarnBridge?
Initially, the main products of BarnBridge are SMART Yield and SMART Alpha. As the protocol gains traction and evolves, BarnBridge plans to introduce many more products that are hedges against fluctuations in the decentralized ecosystem.
SMART Yield
(Source)
SMART Yield is a product that mitigates interest rate volatility risk using debt-based derivatives. This product is able to flatten the risk curve across DeFi by bundling loans in a CLO-like security and then splitting the CLO into tranches, with each tranche having a varying yield and risk.
These tranches are then tokenized and sold back to investors, who can now choose to buy riskier/safer tranches depending on their investment strategy. This is opposed to current models where investors have to buy exposure to the entire risk curve of the lending protocols.
SMART Alpha
(Source)
SMART Alpha is a product of bonds that provide market price exposure risk mitigation using tranched volatility derivatives. This product is not structured like traditional yield tranches, but instead with various levels of market price exposure.
The idea is that every tranche of price exposure does not need to be flat across the entire risk curve, meaning the first $100 of price exposure does not need to be subject to the same upside and downside volatility.
In other words, the SMART Alpha product is similar to having fractional ownership but with different risk/reward for the tranches.
5. How is BarnBridge Governed?
BarnBridge is initially governed by the LaunchDAO and will transition its governance to the BarnBridgeDAO once the protocol has grown sufficiently and $BOND tokens are widely distributed to community members.
LaunchDAO
The LaunchDAO is a temporary governance solution that includes the project founders, seeders, and advisors for building the initial version of the protocol. The LaunchDAO uses an Aargon DAO template and a native governance token, $BBVOTE.
The native $BBVOTE token is distributed 45% to Founders, 45% to Seeders, and 10% to Advisors. The $BBVOTE tokens are used for voting and the minimum for a vote to be passed is 62% of the voting power.
During the LaunchDAO, the initial supply of the $BOND token will be kept in the Launch DAO treasury.
BarnBridgeDAO
The BarnBridgeDAO is controlled by the $BOND token holder community. The BarnBridgeDAO will have full control over the protocol and the features, upgrades, and improvement proposals built into it.
$BOND tokens will be used as voting power and the project will be in the hands of the community. The BarnBridgeDAO will be the final protocol DAO.
6. Where to Store $BOND?
BarnBridge (BOND) is an ERC-20 token residing on top of the public Ethereum blockchain. That said, you can store $BOND in any ERC-20 token supported wallet.
However, the best wallet for storing $BOND are non-custodial Web3 wallets that provide seamless access to the best DeFi applications and protocols, like BarnBridge. That said, DeFi wallets are the best for storing $BOND because the token is widely used and supported in the Ethereum-DeFi ecosystem.
Popular BarnBridge (BOND) Wallets:
- Trust Wallet (mobile)
- Argent (mobile)
- Coinbase Wallet (mobile)
- MyEtherWallet (MEW) (web)
- Metamask (web)
In addition to the above-listed wallets, BarnBridge (BOND) can be stored on a wide variety of other reputable wallets supporting ERC-20 tokens.
7. Where to Buy & Sell $BOND?
BarnBridge app interface (Source)
You cannot yet buy or sell the $BOND token as it has no price and is not yet listed on any centralized or decentralized exchanges.
The $BOND token is currently undergoing its distribution process through Yield Farming in the BarnBridge ecosystem. Via the BarnBridge app, users can stake DAI, USDC, and sUSD in the BarnBridge Yield Farming staking contract to receive $BOND token rewards.
This Yield Farming contract holds 8% of the total supply (800,000 $BOND tokens) that are being distributed to community members who stake DAI, USDC, and sUSD.
In addition to the BarnBridge Yield Farming contract, community members will be able to acquire $BOND tokens through the “Liquidity Pool Incentivization” program. This program will initially be granted 20% (2,000,000 $BOND tokens) and each epoch will have 20,000 $BOND tokens.
Once the Liquidity Pool Incentivization program starts, it will run for 100 weeks and each epoch will last 1 week. Users will be required to stake uniswapv2 BOND/USDC LP tokens (USDC_BOND_UNI_LP) to participate in this program.
As of October 23, 2020, this program has not yet been launched.
Hope you enjoyed that read :) Let me know if I have missed something in the comments.
