BarnBridge Review

The essence behind the existence of decentralized finance is to create an alternative financial ecosystem based primarily on privacy, freedom, and efficiency. Since last year, DeFi’s numbers are reaching constant all-time highs, especially since the explosion of yield farming and cryptocurrency derivatives. BarnBridge wants to be the first fluctuation derivative protocol, creating the first cross-platform derivatives protocol where investors will be able to profit on risk (a.k.a market fluctuations).

Introducing the Concept

Currently, some decentralized yield products are yielding higher APY than yield products in traditional financial markets. These products are crypto lending markets, where borrowers stake digital assets and receive digital assets in return (instead of fiat currency).

Although most of these loans are short-term transactions involving crypto traders, this decentralized way of lending and borrowing assets has proven to be highly efficient. This fact is primarily due to the nature of DeFi, which is ruled by smart contract technology.

Empowered by algorithm-based fintech, smart contracts can hold loan collateral until both parties in a transaction fulfill their obligations. Hence, smart contracts can ensure lenders by acting throughout custody, settlement, and escrow inexpensively and rapidly. 

Given these efficiencies provided by decentralized finance, plus the higher risk involved, it is not hard to see why yields do not stop increasing amid DeFi protocols. 

BarnBridge believes that these efficiencies will extrapolate to mortgage debt and corporate debt over time, generating a massive migration movement for a decentralized ecosystem. 

As more complex derivatives based on debt and yield will start moving to decentralized platforms, BarnBridge believes that is their mission to provide an efficient gateway for this transition. Their main point is to make the decentralized financial system more efficient, risk-flexible, and attractive for TradFi players. 

What Is BarnBridge? 

BarnBridge Dashboard

BarnBridge plans to be the first fluctuation derivative protocol, creating the first cross-platform derivatives protocols for all fluctuations. The initial roadmap reveals products focused on yield sensitivity and market price. 

Over time, they plan to introduce a vast variety of hedges against fluctuations in the decentralized ecosystem, working as an agnostic tool when it comes to different platforms and assets. 

The platform aims to soothe the risk curve for digital assets and yield sensitivity transactions, offering a layered risk management tool for both DeFi and TradFi investors. Their solution is based on building more efficient debt and yield based derivatives. 

Designed to work across different platforms by tokenizing risk with fixed yield and volatility tranche products, the idea is one of the most promising projects announced in 2020.

DAO First Approach

When BarnBridge first started, the project wasn’t meant to be a traditional company but to start as a DAO (Decentralized Autonomous Organization).  After the team behind the project went back and forth on which business model would fit the project better, they decided to go DAO first.

The idea is that BarnBridge will be a protocol governed by the BarnBridge DAO and its native token, called BOND. At first, the governance of the project was split amid its core team, consisting of its two co-founders and the development team. 

Further reading: Find out what are the best DeFi wallets this year.

Then, they decided to destinate a fair share of the token distribution for seed round funders and pre-launch partners. Nevertheless, the majority of the distribution will be destined for the community.

Based on a YFI-like model of fair distribution launch, the distribution of BOND tokens will be shared such as:

  • 68% of tokens to the community.
  • 10% of tokens to the DAO treasury.
  • 22% of tokens shared between the core team, seed round investors, and advisors. 

The DAO treasury will be managed by the BarnBridge DAO. Hence, the community will be voting on what will be done to these funds.

Yield Farming and Incentivization for Liquidity Providers

On September 23, BarnBridge announced an upcoming two-phased liquidity mining program. The goal is to facilitate a fair and inclusive distribution of their BOND tokens to more investors in the future, democratizing the protocol even more. 

Their idea is to release two sequential staking contracts, one for yield farming and a second one for liquidity pool incentivization. Each of these contracts will have distinct specifications around the distribution of BOND tokens.

However, unlike other projects that failed for being too fast-paced, BarnBridge is working more diligently on structuring the idea. They are currently auditing all the contracts involved to ensure security and stability, so yield farmers will be able to harvest on fertile soil. 

BOND NFTs – BarnBridge Exclusive ERC-721 Tokens 

BarnBridge developed a way to reward early-stage community participants with exclusive NFTs (Non-Fungible Tokens). 

The main idea is to use these NFTs as a “tag” mechanism for early-stage community members. Hence, team members will not lose track of those members who helped the project to grow early on.

On October 5, BarnBridge officially announced its BOND NFT. These unique tokens are part of an exclusive contract for two hundred fully compliant ERC-721 tokens minted by InfiNFT. 

Who Is Behind The Idea? 

The core team consists of co-founders Tyler Ward and Troy Murray, aided by the development team led by other co-founders Milad Mostavi, Dragos Rizescu, and Bogdan Gheorghe. 

BarnBridge is the brainchild of Tyler Ward, who has been around the crypto scene since 2016 when he started working in Consensus. 

After a while, Ward became fond of derivative products and added it up to the concept of programmable money, smart contracts, and blockchain fintech to create the project. 

On September 10, BarnBridge closed a successful $1 million seed round, which included industry-leading figures such as Kain Warwick (Synthetix), Stani Kulechov (Aave), Andrew Keys (DARMA Capital), and other prominent players. 

Conclusion

BarnBridge is a promising project that aims to create the first cross-platform derivatives protocol for any fluctuations. Their first products will focus on yield sensitivity and market price. 

In the long-term, they plan to introduce a wide range of hedges against fluctuations in the world of DeFi. Their purpose is to smooth the risk curve for digital assets and yield sensitivity transactions, by providing a layered risk management tool.

Currently, the project is still in the pre-launch stage.