(DEPRECATED) Proposal to Whitelist BOND (BarnBridge) + LM Rewards

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BOND Token Summary Information - As of Time of Writing:
Contract: 0x0391D2021f89DC339F60Fff84546EA23E337750f
Max Total Supply: 10,000,000 BOND
Circulating Supply: 1,652,481 BOND
Current Holders: 4,866
Total Value Locked: $440M
Market Cap / TVL Ratio: 0.22 (compared to Bancor 0.85, Aave 0.96, Synthetix 1.22)
Uniswap Liquidity: $43M

TL;DR Abstract:

  • BarnBridge is the first risk tokenizing protocol that allows for hedging yield sensitivity and market price volatility using debt pools on other DeFi protocols and transforming single pools into multiple assets

  • Impressive team with identities fully disclosed (Meet Our Team – BarnBridge)

  • Strong community (see Discord, GitHub, Forum, etc. links below)

  • Security first approach to development (see various audits noted below)

  • Governance handed over to DAO in early February 2021 (DAO audits - Haechi and Quantstamp)

  • Shipping Smart Yield (SY) products on March 15, 2021 (SY audits - OpenZeppelin and Hacken)

    • Junior token - jToken (ERC 20 token with added risk)
    • Senior bond - sBOND (NFT with less risk)
  • Smart Alpha product expected to be released in the Spring of 2021 (see discussion below)

  • Key advisors - Kain Warwick (Synthetix), Stani Kulechov (Aave), Aaron McDonald (Centrality)

  • Stated Liquidity Providers - Fourth Revolution Capital and ParaFi Capital

  • Currently no CEX listing; is supported by Coinbase Custody

  • Involvement with the Open DeFi network and the DeFi Alliance

Description of BarnBridge and Product Offerings:

BarnBridge started as an idea in Q2 of 2019 well before DeFi collectively had reached even a billion TVL. BarnBridge seeks to provide a range of products that allow investors of all skill levels to manage their individual and portfolio risk exposure through a secure, decentralized, and permissionless platform. At scale, BarnBridge allows you to trade in and out of any risk exposed position for any asset in the world. Assuming infinite liquidity, the project can build infinite numbers of products and hedged strategies. This project brings DeFi to institutional participants as its products are structured in a way that is already very familiar to them and easy to use.

Smart Yield allows users to tranche out the yield from the debt pools of other projects, such as Aave, Compound, Cream or Yearn Finance to normalize the risk curve by creating derivatives for risk mitigation. Users are able to buy junior or senior tokens which represent tranches. Junior token holders provide liquidity and buy risk from senior bond investors. The risk here is variable rate annuities going below the expected level. Investors who buy senior bonds will have a guaranteed yield/interest rate for the life of the bond. At the same time, juniors will benefit from the extra rewards generated by tokens locked by seniors in cases where the variable APY of the underlying lending protocol (including the governance token rewards) are higher than the weighted average guaranteed yields of current seniors. Junior tranches are ERC-20 fungible tokens. Senior tranches are ERC-721 (NFTs) non-fungible tokens.

Smart Alpha is market price exposure risk mitigation using tranched volatility derivatives. Smart Alpha bonds will not be structured via traditional yield tranches but instead with various levels of market price exposure, which will be call risk ramps. The idea is that every bucket or 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 deserve the same upside and downside volatility. This is similar to having fractional ownership, but with different risk/reward for the fractions.

Benefits for Bancor - Rationale:

BarnBridge has a strong community which would bring more users, liquidity, and fees to Bancor. As of time of writing, if 100% or 50% of BarnBridge’s liquidity on Uniswap migrated to Bancor the pool would be in the top 10 or 20 Bancor pools, respectively. Additionally, within a week from date of writing, BarnBridge will be launching its Smart Yield product which will create jTokens that could benefit Bancor by providing an opportunity for a number of additional trading pools to users who would already be familiar with using the protocol by then.

If there appears to be sufficient enthusiasm, I suggest we formally put this forward as a proposal after March 15th when the first BarnBridge product is shipped and once the expected upward price volatility has evened out. Then, within a month after Smart Yield is launched, I would suggest evaluating the BOND pool on Bancor, TVL in Smart Yield, and then considering adding jToken pools.

Summary Articles:

https://medium.com/barnbridge/introducing-barnbridge-3f0015fef3bb
https://medium.com/barnbridge/barnbridge-smart-yield-specs-unveiled-fc42ec527701?source=collection_archive---------8-----------------------
https://medium.com/barnbridge/barnbridge-2021-roadmap-barn-building-plans-8be17f4ab51e
https://medium.com/barnbridge/dao-first-a-new-governance-model-863e8434bf00
https://medium.com/barnbridge/barnbridge-standards-and-disclosures-c218bb29c0f6
Community Links:

Example of tranched debt pool - for illustration purposes only:

4 Likes

This is an incredibly thorough Proposal, @Link_of_riche .

I support this 100%

4 Likes

Would be great to see this listing happen

3 Likes

Thorough and well written proposal @Link_of_riche . Fully support it and happy to answer any questions from the Bancor community on BarnBridge.

5 Likes

Barnbridge BOND would be a great addition to bancor as it brings the vibrant community to the bancor and I will definitely pool BOND if this goes through.

3 Likes

No. No microcaps. Focus on top 100.

Nobody is trading BOND. Nobody cares.

hardly a micro-cap but u could really be more courteous about the way you respond to teams and communities who show interest in bancor. nevertheless im a bit concerned with the volume, since the picture above was taken there has been a steep dropoff in volume. i do like barnbridge there is a lot there but as mentioned in the post i would like to see their working product launch first to bring more utility to the token aswell as volume.

2 Likes

Big fan of BarnBridge. Great team and one of the best, a very active community.

Whitelisting definitely makes sense. Building a relationship with barnbridge i think would be great for both projects. Having their jTokens on bancor could be really interesting.

They have decent rewards on their LM on uniswap
I feel like this is the only strange part of the deal as far as LM rewards goes. Maybe LM them if they brought those over? I don’t think it’s that smiple, but just pointing out the main issue as i see it.

2 Likes