Token BOND protocol based on Ethereum, BarnBridge, has gone from $1 to $150 in less than a week.Of the total BOND supply, 60% will be distributed to the community and 8% to “yield farmers.Although Ethereum has fallen below $400, at the time of publication, it still records almost 7% profit in the last week and 10% in the last 30 days. Market sentiment is highly bullish. Investors have paid particular attention to the BarnBridge protocol BOND token. Since its launch, it has shown one of the best performances in the DeFi sector.
According to its Twitter page, the decentralized protocol accumulates about $332 million in Total Value Locked. BOND was launched on October 25th with a trading value of $1.33. At the time of publication, BOND stands at $150 after falling from its all-time high of $182. This represents an increase of 11.178%.
As reported by CNF, the protocol has raised a lot of expectations among some of the most important personalities in the DeFi sector. Among them the founder of the Synthetix protocol, Kain Warwick, and the founder of the Aave protocol, Stani Kulechov. Both participated in a funding round that accumulated $1 million. The round was led by Fourth Revolution Capital (4RC).
What is the difference between BarnBridge and other Ethereum DeFi protocols?
BarnBridge is a decentralized protocol for tokenized risk. It has been created to operate as a cross-platform protocol. Investors using it will be able to build derivative products from “any fluctuation in the market to hedge against various risks”. Thus, Bonds will be created and offered to investors with varying levels of risk.
The protocol will allow investors to choose the amount of risk and return they wish to take. In doing so, Investors who prefer to avoid risk are encouraged to use the protocol. The research firm Multi.io Research provides the following example to explain how BarnBridge works:A real-world example of this process is mortgage-backed bonds, in which the safest “AAA” bonds can be combined with less secure “BBB” bonds to increase the yield. The new combined bond is then hedged between two different classes of investors who choose their possible returns according to their risk appetite.
he firm adds that BarnBridge will add two products in the coming months. Again, these products will aim to be “a safer alternative” for users’ investment in the DeFi sector. The products are called Smart Performance Bond and Smart Alpha Bond. In the first product, the less risky investor will receive 3% “guaranteed” return, the second one will offer a solution to reduce the volatility of an asset by “subsidizing” the risk.
The BOND governance token will allow the community to have a greater say in key decisions of the protocol. The token will have a total supply of 10,000,000. 60% will go to the community, 8% to the yield farmers, 10% to the DAO treasury, 22% to the founders and initial investors and advisors.
CoinGecko co-founder Bobby Ong has stated that the token is overrated. Therefore, he expects there will be a drop in price during the next week. Ong believes that the project is still very recent and that “there has not been an efficient price discovery”. In that sense, Multi.io Research adds: Depending on the token price and the community and founders’ commitment to the project, “HOLDING” the token can have a negative impact on the market by creating an unsustainable inflation rate for the first 2 years of the project’s life.