BarnBridge (BOND), launched in September 2020, is a DeFi (Decentralized Finance) platform that aims to tokenize risk, offering users the ability to modulate their risk exposure within the DeFi ecosystem. This innovative approach allows for the creation of derivative products that can either amplify or mitigate risk for investors, thereby attracting a broader audience from traditional finance sectors into DeFi by providing tools for risk management and adjustment.
BarnBridge introduces a unique system of tranches for managing digital asset risks, breaking down these assets into smaller portions that can be combined and offered as derivative products. This system enables users to hedge against yield sensitivity and price volatility in the DeFi space by investing in tokens representing various levels of risk and return. Essentially, it offers a spectrum of investment opportunities, from conservative to speculative, making DeFi more accessible and appealing to a wider range of investors.
The native utility token of BarnBridge is BOND, an ERC-20 token used for governance and staking within the platform. Holders of BOND can participate in governance decisions, propose or vote on protocol changes, and have a say in the direction of the project. As of April 2021, the circulating supply of BOND was around two million, with a hard cap of 10 million tokens set to be released as rewards over a period of two to three years.
One of BarnBridge's flagship products is the SMART Yield bonds, launched in February 2021. These bonds offer tokenized tranches that represent varying degrees of risk and yield from a group of loans deployed on various DeFi lending protocols. By purchasing a SMART Yield bond, investors can mitigate interest rate volatility and customize their investment to match their risk tolerance.
BarnBridge's approach to DeFi, focusing on risk tokenization and management, has the potential to significantly impact the industry by attracting risk-averse investors from the traditional finance sector and providing more sophisticated risk management tools for all DeFi participants.
