The locked position quickly exceeded 200 million and was supported by multiple funds. The founder of BarnBridge revealed the story behind the project financing

Original Source: Centrality Chinese Community

Recently a project called BarnBridge became popular , within 12 hours of going online, the total lock-up amount reached about 200 million US dollars. At present, the project has obtained investment from Fourth Revolution Capital, ParaFi Capital, Kain Warwick, founder of Synthetix, Stani Kulechov, founder of Aave, and managing partner of DARMA Capital. Andrew Keys, Centrality, Blockchain Companies, Dahret Group and other institutions and well-known practitioners have invested $1 million in seed rounds.

At BarnBridge In the early stage of financing, due to various factors, the team had to politely reject the investment intentions of Framework, Accomplic, Morgan Creek and even Pentera.

CENNZnet’s CEO Aaron McDonald is currently serving as BarnBridge's chief consultant, and Centrality behind it also participated in BarnBridge's seed round investment.

What is BarnBridge?

BarnBridge is a span The graded derivatives agreement of the platform quantifies and marks the risks of DeFi products in batches through several dimensions of yield and volatility, and grades the risks to provide investors with different needs for selection.

BarnBridge Original Concept In the second quarter of 2019, when MakerDAO started to gain mainstream attention and capture the imagination of what is now known as DeFi or decentralized finance community. More than a year later, with 60% of global debt yielding less than 1%, and more than $15 trillion in global debt generating negative interest rates, capital continues to flow into riskier yields.

To answer community questions, BarnBridge hosted an online Q&A to answer questions about CENNZnet Everything with BarnBridge, here in full:

Tyler: Hi everyone, nice to meet you, I'm Tyler, one of the founders of BarnBridge. I also currently run Proof Systems, one of the world's largest dedicated digital property marketing and UI/UX companies. Worked with ConsenSys, Earn.com (acquired by Coinbase), FOAM, Dether and Grid+, Centrality, Sylo (decentralized chat app with 300k users in NZ), NEAR, DARMA Capital, SingularDTV and snglsDAO. He started working on encryption technology at the end of 2016 and has invested in several e-commerce companies.

Q1: What kind of project is Barnbridge, and what problem does it ultimately want to solve?

Tyler: We The volatility of the price will be converted into the form of tokens, and BarnBridge will be the first agreement to tokenize volatility.

In the smart contract Before the advent of technology, it was nearly impossible to decentralize, transparently track and structure returns to provide a hedge against any volatility.

Theoretically speaking , any market-driven volatility can be used to construct derivative products to hedge various risks. Examples include interest rate sensitivity, fluctuations in underlying market prices, fluctuations in market forecast probabilities, fluctuations in mortgage default rates, fluctuations in commodity prices, and more.

Traditional finance can Using a large number of derivatives to hedge risks, it's time for DeFi to have its own volatility management products.

Q2: Can you introduce your team background?

Tyler: in While helping NEAR, ConsenSys and other companies to do UI and promotion, I learned a lot about DAO and smart contract protocol itself. After experiencing the ups and downs of different projects, I gained a new understanding in contract management, marketing and other aspects.

I did early He worked as a fixed income trader, and later worked with decentralized derivatives projects. This experience allowed me to initially form the prototype of BarnBridge in April 2019. But the derivatives market at that time was not mature enough.

As for the team, we Very lucky to find former ConsenSys early employees. Another of our co-founders, Troy, is a master of community governance. He was preaching for DAO before the DeFi industry took shape.

Our development The team built many existing tools for ConsenSys development. If it weren't for COVID, if ConsenSys had managed to raise money, I wouldn't have found such a great co-founder!

Q3: Why did BarnBridge get support from many well-known organizations and founders of DeFi projects from the very beginning? support? Is there a story here?

Tyler: I know a lot of industry leaders because of work. Neither I nor the rest of us are anonymous (you are welcome to follow us on Twitter). The financing situation is this:

When I finished writing the white paper last April, I realized that the market was not yet mature. At that time, I had already made money in SNX, but hoped to better manage the risk of all my DeFi investments.

I kind of want to build this protocol or someone else has built something similar to BarnBridge now, so I sent Kain at Synthetix An email to get him to like the idea.

Kain loves it The idea, but he said he was busy too, and if I could find a development team that could build something as complex as BarnBridge, he'd like to fund it. He agrees with me that its own protocol can be integrated with other protocols instead of building directly on Synthetix. So my founders and I put in $100,000 of our $1 million Series A funding round to start developing while we were done with the white paper and talking to investors.

US$1 million It was finalized quickly, and finally pushed away several large funds such as Framework, Accomplic, Morgan Creek and even Pentera. Also chatted with Coinbase. In the end, apart from Kain, our investors include ParaFi and Fourth Revolution Capital, and Aave founder Stani was the last to join (it seems to have squeezed ParaFi away because the share is really not enough).

Q4: Community governance is a very important part of DeFi projects. I think BarnBridge started Just enabled LaunchDAO for project collaboration and governance, why is this new model launched?

Tyler: We It is hoped that Barnbridge will be distributed by the community. At the beginning, I asked our investor, Kain, the founder of Synthetix, what advice he would give to his original self. Kain said that he would suggest that he build a DAO first.

We come first The first DAO is called LaunchDAO, which is mainly used to incubate projects and manage investment funds. The DAO of the project is BarnBridge DAO, through which the community will manage 68% of the tokens and treasury (10%) belonging to the community, and work with the team to control the future direction of the project. The team, advisors, and seed investors will receive 22% of the tokens.

We seem to be The first DAO-first project.

Q5: What is the difference between LaunchDAO for corporate governance and BarnBridgeDAO for project community governance , and how do they work together?

Tyler:

Launch DAO is mainly used to manage the investment in the seed round;

In the seed round, we raised 1 million US dollars, of which 100,000 US dollars From the founding team;

BarnBridge DAO will manage the protocol, treasury;

The accumulated income of all platforms will enter the treasury. Administered by voting;

Q6: What are Smart Income Bonds and Smart Alpha Bonds? What are their functions?

Tyler: The value of any asset is affected by two variables:

The fluctuation of yield (stock dividend, Rent, interest)

Price fluctuations (stock prices, house prices, bond prices)

"Smart Income Bonds": Hedging asset return volatility through bond derivatives . (note the rate of return)

Specifically, the benefits will be divided into two categories: priority and inferior.  

priority The class will have its own token, and the interest rate received is fixed (you can think about how DeFi can get fixed income now), and the inferior class will also have its own token, and the interest rate received is fluctuating (where is this? It can be obtained, Aave, compound are all fluctuating interest rates).

high income/ When it is low, the income of the inferior category will be higher/lower, but the income of the priority category will be relatively low, but it will be very stable and the interest rate is basically fixed.

"Smart Alpha Bonds": Hedging the price volatility of the asset itself through layered volatility derivatives. (Note the price)

Suppose the price of ETH is $100, we can also divide this $100 into 2 different tokens.  

if Ether has risen by 10%, that is, the price reaches 110, and the alpha is $10.

This $10 Alpha can also be distributed to the token holders of the priority and inferior ranks according to a ratio.  

Q7: How does BarnBridge hedge through smart bonds and fixed interest guaranteed by DeFi income Does the market price of ERC20 tokens fluctuate?

Tyler: Simple In other words, if there is a loss, the investors of the inferior level will bear the loss first. Q&A session we can discuss in depth.  

Q8: Please introduce BarnBridge’s token economic model, how does the token BOND distribution, and how to capture the value of the entire protocol?

Tyler: BarnBridge’s $BOND is a governance token, mainly used to manage BarnBridge DAO and related agreements.

Similar to Compound , $BOND holders can vote to manage treasury and income usage.

The community will Decide whether $BOND holders can receive fee dividends or these fees are used to develop new products.

Platform fees Currently set at 0.3%, similar to Uniswap.

The picture below is Token Distribution:

The following figure shows the time distribution of tokens:

< br>

Q9: BarnBridge has also released its own NFT. Will there be any new plans for NFT use cases?

Tyler: At present, these NFTs are mainly used to motivate the community.

they work One is used to decorate the name in Discord. We don't intend to give these NFTs more meaning, but one of their core purposes is to record those who helped us in the early days.

Good English Friends can read this article: https://medium.com/barnbridge/introducing-the-barnbridge-erc-721-the-nft-bond-collection-ca2be6aefa84

Q10: How does BarnBridge link more traditional financial investors and become their entrance to invest in DeFi?

Tyler: This direction is very big, and investors and traditional financial markets are very recognized.

Jin and Morgan After working with Mark Yusko of Morgan Creek and Andrew Keys of DARMA Capital, I found that the volatility of virtual currencies is a big reason that prevents traditional financial institutions from entering the market.  

Japan Hedge fund Rakuten gave me similar feedback.  

So We believe that reducing the downside risk (Downside Risk) is the first step to attract formal financial investors into DeFi.  

before As I mentioned, currently DeFi cannot even provide the most basic fixed-rate products. (focus)

BarnBridge will provide better risk management tools, but we cannot ignore new risks such as smart contract risks. Cozy.Finance is currently breaking through in terms of security.  

When When we can provide more stable income, that will be the day when it will happen.

Q11: How is BarnBridge different from other DEFi projects (eg MakerDAO, AAVE)?

Tyler: Compared with projects such as Maker or Aave, we do not do lending.

We will be based on These projects, take advantage of the benefits they provide and then divide the risk.

So although the white paper It was built as early as April 2019, but because the overall volume of DeFi at that time was too small and the source of income was not enough, so it could not be started until now.

Barnbridge needs integration The income of multiple platforms is then divided into risk structures based on this rich income pool.

Q12: Liquidity mining is very hot, and BarnBridge also has a plan for liquidity mining. Can you explain how BarnBridge's liquidity mining participates and how it differs from other protocols.

Tyler: We should be the first mining pool to do stable currency stacking, which is USDC , DAI and sUSD are put into a pool for mining.

Q13: I learned from the official blog that smart bonds are your first product, Can you describe your future product plans?

Tyler: Development line:

LaunchDAO (already launched)-> Phase 1 and Phase 2 Mining Agreement And LP Rewards (online)-> Smart Income Bond Product (under development)-> BarnBridgeDAO (online with Smart Bond)-> Smart Alpha Bond (under development) 

The route after that will be determined by the community.

In addition to answering the above questions, Tyler also answered some casual community questions on the spot , the following is the full text of the question and answer:

Q1: At present, I found that only three kinds of token mining are supported. Will more channels like USDT and ETH be opened in the future?

Tyler: Will USDT and ETH be used in the future. The first step of mining will not, because USDT has a peg risk. ETH is not 1:1 correlated with other stablecoins, there will be unpaid losses.

Q2: What is the progress of the current project audit?

Tyler: We did 2 external audits and a ton of internal audits. This is probably the most audited and tested yield farming in history. We also released the code 3 weeks ago and opened the staking interface 5 days before yield farming started so the community could see it.

Q3: We often hear that some DeFi platforms are hacked and talk about the security of DeFi platforms quality. Is Barnbridge confident of securing the financial system platform?

Tyler: I answered above. With so much money in the contract, anything could happen. Even Ethereum has been hacked and has bugs. However, I think a lot of people are looking at these contracts and team building, which is well-known in the industry. We have been working in the industry since 2016 and we use our real names and reputations. There is a 0% chance that we will be breached because the purpose of the contract is to return funds only to those who invested them. However, smart contract risks always exist. Every platform has smart contract risks. That's why we do such an extensive audit.

Q4: How to motivate everyone to hold BarnBridge tokens for a long time? What do users think about governance tokens such as curve mining sensational news?

Tyler: I think when BarnBridge DAO and Smart Yield go live, the community will be on the platform Vote for staking rewards. In the short term, you can use the $BOND in the LP pool to harvest more $BOND.

Q5: Do you have any plans to expand layer2?

Tyler: We are communicating with Kain optimistically, and I am also observing what Stani is doing results.

Q6: What is the distribution plan for 60% of the tokens planned to be distributed to the community? (To whom?) How to ensure fairness and implementation of the plan?

Tyler: Most of it will be awarded via LP rewards, which is why it now shows 28 on the app interface % yield, because 8% is yield farming and 20% is Uniswap liquidity pool. So if 20% of liquidity goes to smart alpha and 20% goes to smart yield, that's 68%.

This article is from a contribution and does not represent the opinion of Rhythm BlockBeats

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia