The global economy has taken some serious blows since the start of the Covid-19 pandemic. It was especially hard in the beginning. The economy is slowly starting to recover. Many governments have lent a hand with various loans and other financial incentives. It was also an active spending period, in which many and high risks were regularly taken on the various financial markets. The crypto markets and exchanges have also benefited from this. At some point, however, that risk will decrease again. Investors then want to hedge their investments. One way crypto investors can hedge their purchases of digital coins is with BarnBridge. The BarnBridge crypto promises a stable portfolio even in the volatile crypto world.
That’s what we’re going to talk about in this blog, about BarnBridge and its associated BOND token. I’m going to explain exactly what BarnBridge is and how it works. We are also going to investigate the team behind this project and take a look at the course. If you want to know where to buy BOND, you’ve come to the right place.
Please note: please note that the text below about ‘BarnBridge (BOND)’ as well as the explanation to it should in no way be construed as advice. The choice for whether and in what way you want to trade (crypto) and which choices you make in terms of investment is up to you and you alone. We are not financial advisors.
Here you can first watch a video showing how BarnBridge works.
- 1 What is BarnBridge?
- 2 How does BarnBridge work?
- 3 Who is on the BarnBridge team?
- 4 What is the BOND token?
- 5 What is the price of the BOND token?
- 6 Where can you buy the BOND token?
- 7 What is the best way to store the BOND token?
- 8 Conclusion
What is BarnBridge?
BarnBridge was founded in 2019 to tokenize risk . Then you probably still don’t know much more. Tokenizing something means turning all kinds of sensitive data into ‘non-sensitive’ data by using tokens. These tokens can then be used in a database or an internal system. All important information of this data is preserved without compromising security.
BarnBridge came on the market in 2020. You can compare BarnBridge a bit with lego for DeFi , where tradable tokens are made. These tokens expose you to the volatility of the crypto markets. However, BarnBridge is designed as a platform independent protocol to minimize the risks of DeFi. As a user, you can then select a risk profile that suits you and cover interest rate risks via multiple DeFi protocols.
Another thing BarnBridge does is redistribute risk. They do this with so-called “tokenized liquid tranches” and this is done with the help of SMART Yield bonds . A tranch in this case is a dollar-denominated part and the risk of a crypto coin is split. Crypto derivatives are then built with these tranches. A derivative is a secondary contract or financial instrument that derives its value from a primary underlying asset. In crypto, for example, that primary underlying earth could be Bitcoin .
Finally, BarnBridge also wants to give you the option to divide your risk management into different layers. Besides that they obviously offer this for DeFi, they also want to offer this for TradFi, Traditional Finance. They do this with the help of yield and debt-based derivatives.
How does BarnBridge work?
BarnBridge has set up a junior-senior model in their pool-to-pool design with several applications. As a result, one group of users actually subsidizes the result of the other group. This makes the various applications of the BarnBridge apps possible. For example, fixed interest and downward price protection.
The native BOND token is also important here, as it is used to vote and manage the platform. It is a DeFi platform, so you can also stake this token.
Let’s take a closer look at the BarnBridge apps and see what they can do.
What is SMART Yield?
SMART Yield went live in March 2021. With this app you can get fixed interest. But you can also get leveraged, variable returns on stablecoin deposits on other crypto lending platforms supported by BarnBridge. Such as Aave , CREAM Finance or Compound Finance . That sounds difficult, but it actually means that the volatility that goes hand in hand with the variable return on DeFi platform is reduced.
The junior and senior models are also returning here. SMART yield uses junior and senior tranched derivatives, i.e. derivatives divided into chunks or tranches, to mint tokens. These tokens then represent a proportionally properly distributed deposit within DeFi protocols.
These pieces, or checkers, have two different tokens. The junior token is an ERC20 token that can be minted by anyone. The senior token is behind an ERC721 token or an NFT, and this represents a bond. So the youth, or the junior tokens, provide the liquidity that the senior bond investors need to receive stable returns. In addition, the junior tokens are used to buy risk from senior bond investors.
Junior and senior tranches
However, the senior bonds have a guaranteed permanent fixed interest rate. For junior token holders there is a risk if they want to buy a senior bond. They run that risk if the floating-rate annuities (repayment plus interest) fall below the projected threshold. On the other hand, junior token holders do have additional income when the variable APY (annual interest) of the underlying debt pool is higher than the weighted average of the guaranteed return of senior token holders.
The collateral from the junior and senior deposits is now placed in liquidity pools. These pools in turn are based on profitable protocols and dApps. Only then is it bundled into a tranche. This way you can access senior tranches and run a lower risk. This is at the expense of a lower interest rate (yield). With the SMART bonds you can now buy and sell the risk associated with returns. The price of this tokenized risk is then directly determined by the market itself.
At the moment this is focused on interest rate sensitivity. Later on, it becomes possible to hedge against various fluctuations. The more the BarnBridge ecosystem expands, the more different hedging options will become available.
What is SMART Exposure?
SMART Exposure allows you to automatically rebalance specific weights of ERC-20 tokens within your portfolio. This is possible because SMART Exposure maintains its own asset pools. You can deposit ERC-20 assets that you want to balance. Then you choose from popular ratios that you want to keep and then have them recalibrated automatically. SMART Exposure are rebalanced after a time-based or ratio deviation threshold is reached.
This diagram is well illustrated below.
SMART Exposure tokens give multi-asset HODLers the ability to passively diversify their portfolios. This way it is easier to navigate the volatile crypto markets.
SMART Exposure started on the Ethereum mainnet, but there are plans to expand to the Polygon Network in the future .
What is the BarnBridge DAO?
The BarnBridge DAO is at the heart of all BarnBridge products and apps. It gives voting rights to BOND token holders. As a result, the BOND community has full control over new protocol proposals. BarnBridge uses the Diamond Standard (EIP-2535) for this. This eliminates the need for token holders to delete their tokens and move to a version 2. Instead, there is an automatic upgrade. It makes BarnBridge a flexible Web3 platform.
Who is on the BarnBridge team?
The team behind BarnBridge consists of 5 founders and 14 other people mentioned on their website.
- Troy Murray — co-founder and has been working with Bitcoin since 2012. He has extensive experience in decentralizing media and entertainment projects.
- Tyler Ward — co-founder and has been in crypto since 2016. He has extensive work experience with various crypto projects.
- Milad Mostavi — co-founder and CTO. Software architect with experience at ConsenSys, among others.
- Dragos Rizescu — co-founder and responsible for product development. He is also involved in various other projects and has been active in and with crypto since 2016.
- Bogdan Gheorghe — co-founder with several years of experience in DeFi.
An experienced team that also has a strong technical team under it. They certainly seem up to the task of leading this project successfully.
What is the BOND token?
The BOND token is an ERC20 token. The token can be staked and managed via an automated and decentralized administration via the BarnBridge DAO. The BOND token will also serve as a medium for security and policy management. No information can be found that quickly about an ICO or a first release.
However, there is a total supply of 10 million BOND tokens and 4,442,599.51 BOND of those are in circulation.
Below you can see how the tokens are distributed. What is striking is how relatively little goes to the team. That is generally a good thing and a good sign. It means the team is committed to the project. They are unlikely to run off with some or all of the investors’ stake.
The BOND token issuance schedule is also clear and started in October 2020. It will take about 2 or 3 years for all 10 million tokens to be unlocked.
What is the price of the BOND token?
If you want to invest in the BOND token, a good start is to know its price. If you are already going to trade, you also want to make a profit. You can make a technical analysis to see what the best buy or sell moment is.
The BOND token entered the CMC market at a price of $127.40 on October 26, 2020. A day later, the preliminary ATH was already reached on October 27, 2020 with a price of $183. After that, the price fell again quickly and on November 9, the price was $19.42. In fact, it has slipped to $15.41 and has remained in the red as of this writing. At the time of writing, at the end of September 2021, the price is $22.88.
At CoinMarketCap , it is just outside the top 300 in place 359. This coin doesn’t seem to have a good prospect at the moment. However, once the full product has been launched and is up and running, that may just change. It is possible that he can still experience a good price development afterwards. It is important to keep an eye on the development of the roadmap to see what is happening there. If you want to invest in this coin, it is important to do your own research.
Where can you buy the BOND token?
What is the best way to store the BOND token?
You have several options to save this token. The safest way is to store them on a hard wallet , also known as a cold wallet . With a hard wallet, such as the Ledger X or S and the Trezor, you are protected against internet hacks.
You can of course leave your BOND token on the exchange where you bought the token. However, now you do not have access to your private keys. The private keys of an exchange remain in the hands of the exchange itself. The danger of a hacked exchange is always there. You then have a chance that you have lost your coins. These wallets on an exchange are also called hot wallets .
As a third option, you can also use an online wallet such as MetaMask or Trust wallet. Here is also another chance of an internet hack, but it is theoretically smaller than a hack on a stock exchange.
BarnBridge offers you easy access to fixed-rate investment instruments. This makes the DeFi space more accessible to ordinary investors. You also have the option to set your own risk threshold, which improves the efficiency of the system.
BarnBridge has also bridged the gap between traditional finance and DeFi. This makes performance platforms and dApps based on smart contracts accessible to everyone. BarnBridge assists in the migration of returns and return-based derivatives from TradFi to DeFi. Decentralized financial products become more efficient and have a more flexible risk in this way.
Thanh Lanh Tran(1989) is Chief Editor from BitcoinUSD.com