- Distinctive features of SMART Alpha $BOND structure.
- BarnBridge can employ SMART Alpha to re-insure some of the liquid pools.
Rising debt levels were also occurring around the world before the Covid-19 financial crisis. On the other hand, the need for traditional TradFi-familiar instruments across the DeFi ecosystem has never been so severe. This is where the BarnBridge idea comes into play.
Idea and Whitepaper BarnBridge crypto was first designed in 2019. At the time, MakerDAO had only recently begun to raise public awareness and succeeded in drawing what we know today as the DeFi community or decentralized finance.
BarnBridge Key Features
BarnBridge aims to build the first derivative protocol with a common infrastructure for all of these fluctuations. In the first stage, the focus has been on the sensitivity of returns and market prices. In later stages, a more comprehensive range of hedges is introduced against fluctuations in a decentralized ecosystem. The purpose of building BarnBridge was to operate independently of the platform and assets.
You can reduce the risk of digital assets and the sensitivity of digital asset returns by dividing BarnBridge into virtually unlimited, separate, dollar-equivalent components or making cryptographic derivatives from them. BarnBridge is designed to smooth the risk curve and provide risk management layer strategies for DeFi and TradFi investors by building more efficient debt and return-based derivatives.
SMART Yield Bonds
The structure of SMART Alpha $BOND is not consistent with traditional bonds. Instead, it is structured through different levels of market price exposure, known as risk slopes. This means that not every bucket or trench needs to be flat across its risk curve. The initial $ 100 price target does not have to be affected by volatility. This can be likened to having joint ownership through a share; Except that the risk/reward is different for the claims.
Recently, the @NexusMutual community has been looking to use @Barn_Bridge SMART Alpha for the $DPI purchased by its treasury. Of course, the Nexus Mutual also has a golden opportunity here to get a $wNXM pool. BarnBridge could even be able to employ SMART Alpha to re-insure some of NexusMutual‘s more liquid pools.
SMART Alpha provides a way to build trenches from a single asset and aggregate multiple purchases with the ability to generate returns. In this low-risk system, a lower rate of return on capital will increase investments while at the same time causing a lower loss to investors when prices fall. However, the above result will be possible without the need for efficiency. The opportunities available to the downstream vertebrae to take advantage of the risk slopes in the context of various collateral obligations are among the logical advances of these slopes.
The Future of BarnBridge
Most calculations related to this process are performed outside the chain with the help of proof certificates. Thus, by doing most of the work outside the chain, one can expect higher throughput and lower costs. Another critical point is that in this way, the security of users is maintained. This application targets a large community of active users, so scalable solutions will be the top solutions.