Fintech Startup Bonded Is Tapping into Massive Emerging DeFi Market

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On average, worldwide interest rates have trended down; with the majority of Europe offering negative interest on saving accounts while the US hovers at close to zero. This leaves a massive population of people, with little financial knowledge, two unfavorable choices. One would be to try their hand at investing or some equivalent of storing it under an old mattress. The latter option, passive saving has become a punishable offense as inflation keeps eating away at purchasing power.

The pandemic has been a perfect stress test on traditional finance and has resulted in abject failure. In an era of low-interest rates, lending has tightened, there’s a shortage of liquidity at traditional banks, corporate debt hit all-time highs and bankruptcies have soared along with unemployment rates. 

And what we’re seeing now is a somewhat obvious shift. Recently, institutions have publicly announced their allocations in Bitcoin, volume at Bakkt has increased immensely and in recent months, the recorded number of BTC on exchanges has dropped considerably. Traditionally, once Bitcoin becomes too “crowded” and expensive, the money finds its way into the more forward-looking products. Waiting in the wings is decentralized finance or DeFi. 

BONDED.FINANCE: Leveraging Crypto Assets to Push Liquidity to the Next Level

The Opportunity

In crypto today, there are roughly fifty billion USD in dormant value locked in altcoins (Altcoins are all cryptocurrencies besides Bitcoin). This estimate represents the collective market cap of verifiable altcoin projects that have price and volume history. Currently, crypto lending platforms support only a few select altcoins while the majority of projects can not collateralize their assets. In the most general terms, as financial instruments come to crypto, supporters of a given blockchain company should be able to earn against their assets. Historically, even the most heralded blockchain projects were held hostage by traders as liquidity has often been outstripped by token inventory on the market. Liquidity came at a great premium and essentially, the success of one project created the failure of another. A finite amount of liquidity playing the equivalent of musical chairs. 

Perhaps predictably, the pandemic has spurred growth in the blockchain space. As physical contact started decreasing, online activity increased. Blockchain development has stepped up considerably and the number of various dApps (decentralized applications ran on a distributed computing system) has accelerated the growth in DeFi. In June of 2020, the amount of value locked in DeFi contracts crested one billion and less than six months later, the number is estimated to be close to twenty billion.

Bonded’s mission is to harvest this unchallenged capital and leverage these assets to push liquidity to the next level. Bonded is developing a full suite of smart instruments that generate incentives, reduce downside exposure, and effectively realize the value in a vast, but previously underserved market. 

Bonded’s pioneering innovation and contribution leverages the untapped altcoin market, in order to create incentivization to lock value (capital) in their contracts.  Given the surge in funding and proliferation of new projects, Bonded believes that their smart financial instruments could go a long way in securing value and are under development with four innovative products.

Ionic

Governed by an open protocol, supported by borrowers and lenders, crypto loans are issued against less liquid altcoins, allowing holders to unlock the borrowing power of these projects and earn on their long-term holdings. This allows supporters of a given project access to capital without needing to exit their positions. 

Bonded Index

Loans are issued against a pool of weighted assets, algorithmically distributing liquidations and risk across the basket. By providing liquidity to these pools, liquidity providers are able to earn a high-yield return composed of transaction fees and interest payments. This is in addition to Bonded’s “upside distribution,” which has borrowers relinquish a small percentage of any upward price movement of the asset during the life of the loan.

LOC Index

Bonded’s Line of Credit Index is a credit product designed specifically for the crypto space and the team’s driving it forward. Through verifiable smart contracts, approved teams can request lines of credit issued against time-locked or otherwise committed tokens. 

bEth Synthetic

Bonded’s synthetic Ethereum is minted against locked collateral, which is rebalanced by smart contracts and pegged to the current price of ETH. bETH offers the Bonded protocol a generalized substitution for ETH, creating inroads for broader adoption and interoperability.

BONDED.FINANCE successfully closed its Private Sale round, raising $2.25 million USD in less than a week. The public sale offering will be on November 15th, taking place on sale.bonded.finance and will be powered by Dolomite, a decentralized exchange driven by the Loopring protocol.

Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.