Welcome to another week of Wealth Mastery and Bitcoins continuing domination of the global financial market. While It’s great to have confirmation that everything we’ve been doing during the crypto winter has paid off. The Defi space is still gaining more liquidity than a Mt Gox custodian. With higher value, longer duration loans added to these decentralized protocols every day. Terrifying to think of what would happen if it all fell apart at the seams, isn’t it? Wouldn’t it be great if someone would build a cross-chain platform to tokenize and capitalize on all that risk? Well, just so happens that a brand new project called BarnBridge is looking to do exactly that.
Introduction
BarnBridge is currently building the world’s first fluctuations derivative protocol ever. With debt levels, known in Defi as Total Value Locked (TVL) in decentralized financial protocols increasing from hundreds of millions last year to billions of dollars in 2020. The yield on these instruments continues to dwarf rates offered by comparable products in the traditional finance sector. Working capital is following the historical trend of higher yields, which is why we are seeing TVL moving to Defi at an accelerated rate. A trend that’s showing no signs of stopping anytime soon. With crypto-backed loans taking the crown for highest yielding Defi APY. Instead of selling crypto for fiat, borrowers are choosing to stake their digital assets and receive digital assets in return. While these loans have mostly been short term loans to traders, the system has proven to be efficient and ready for expansion. What’s more, the efficiency of smart contracts and DAO technologies allows for far more complex derivative instruments to be built. Providing a level of transparency and security unfathomable to current financial networks. This migration of yield and yield-based derivatives from less efficient centralized financial systems to more efficient decentralized financial systems will be one of the largest movements of wealth in human history. BarnBridge exists to help ease this transition and make the decentralized financial system much more efficient, risk-flexible, and attractive to a wider range of participants.
In the beginning, BarnBridge will focus on yield sensitivity & market price. The end goal of which is to become a platform, and asset agnostic protocol that offers a wide variety of hedges against fluctuations in the decentralized ecosystem. By algorithmically pooling interest generating digital assets on a number of lending platforms, BarnBridge will create greater efficiencies by spreading risk and normalizing the industry risk curve. BarnBridge does not lend money directly off its platform. Instead, it pools lending across the entire industry, allowing it to be completely blockchain agnostic. This pooled collateral would then be deposited into lending protocols or yield generating contracts, where the yield will be bundled up into different tokenized tranches. So you could buy exposure to the most senior tranche and get a lower yield, but have a much lower risk profile. These SMART (Structured Market Adjusted Risk Tranche) bonds are a way to buy and sell risk on yield with all pricing driven solely by the market. This in turn allows for more complex structuring and bond rating systems to become available. These SMART bonds are broken up…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
