Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover an up-and-coming DeFi prime brokerage that just launched–Blueberry.
Blueberry provides composable automated leverage and risk management to enable lending single-sided assets for the highest passive yields while farmers lever up their favorite DeFi strategy.
In traditional finance, a prime brokerage refers to a bundle of services that investment banks and other major financial institutions offer to hedge funds and similar wealthy clients. A prime brokerage model in DeFi could unlock and bring more utility to on-chain capital.
Currently, DeFi LPs are challenged by a lack of liquidity, where rates for the best strategies don’t offer risk profiles ideal to deposit substantial funds in-app. Meanwhile, protocols need liquidity to offer their DeFi services to other users and such liquidity can be challenging to attract without major token incentives.
With Blueberry, users can earn higher yields, access more capital for specific strategies, and take advantage of niche opportunities. You can think of this new Blueberry product as having similarities to what degens enjoyed about Alpha Homora, Extra Finance, and Gearbox.
The biggest value-add with Blueberry will be boosting yield up to 50x for certain DeFi strategies. LPs on platforms like Curve, Balancer, and Uniswap could turn single-digit yield into triple-digit yield while keeping borrow costs low.
For example, let’s assume a Curve pool for weETH-rswETH yields about 10% APY. Users can deposit their collateral and borrow 10x for the weETH-rswETH LP — earning almost 100% APY before subtracting borrowing costs.
Blueberry helps to fine-tune the leverage and allows even more risk-averse LPs to opt for lower leverage and lower risk, while higher leverage is available for the degens.
With Blueberry, we can expect a number of DeFi strategies including:
- Lending
- Yield arbitrage
- Leveraged spot trading
- Concentrated liquidity provisioning on Uniswap v3
Blueberry is in the early stages of its launch. For Blueberry to serve as a DeFi prime brokerage, decentralization will require a new native token, BLB. BLB will represent a stake in the governance process crucial to Blueberry’s risk management. The token will determine new integrations, token rewards, and the future of Blueberry and its DAO.
The token launch plan involves a lockdrop used to gradually distribute BLB to users who help contribute to the early success of the protocol.
Starting January 29th on Ethereum Mainnet, Blueberry launched a 56-day campaign where users can lend single-sided cryptoassets (listed below) to earn a share of 50M bdBLB (5% total supply), and secure a stake in decentralized governance for this new protocol. Depositors can withdraw anytime but there is a 1% withdrawal penalty fee before the 56-day campaign completes.
All BLB emissions will be distributed as bdBLB (Bonded BLB) to lenders every two weeks. bdBLB is the protocol vested rewards and governance token that can be redeemed for BLB at a 1:1 ratio after a one-year unlock. Users who wish to exit early can do so for a penalty consisting of an acceleration fee and a redistribution penalty. The total early unlock penalty begins at 50% and decays linearly over a year.
A few other key…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
