Editorial
In past appearances on podcasts and video interviews, Tyler and Troy have alluded to how the use of tranches in BarnBridge products inherently requires bringing two different types of risk profiles to the table. Whereas most of today’s DeFi users fall into the risk-on bucket, it will be the risk-averse users (read: their larger sums of capital) that act as kingmakers for the entire space’s future. Applications like SMART Yield and SMART Alpha are meant to serve as a bridge between these two worlds, making harmonious markets out of the barbarians on both sides of the gate.
That’s more than just a play on words. Often times, existing DeFi users are quick to write off more risk-averse traditional finance practitioners as “buttoned-up”, “pencil pushers”, and any other variety of colorful language that today’s investing forums encourage. This couldn’t be further from the truth. You don’t come to manage billions on behalf of the world’s most powerful institutions by being complacent. Beneath the heavy veneer offered by suits, manicured public relations, and political ties, lies the same primal urge to prove something with a PnL statement (lot to unpack here, I know), which retail investors have come to flaunt so blatantly. Take a look at the unfolding Archegos saga if you disagree.
And so, what separates the more raggedy barbarians on one side of the gate from the prim and proper ones on the other? Education - except the plot twist is, it’s those who have returned from the frontier that have the upper hand. They are the ones who have seen what “self-driving” smart contracts can do, what the earth-shattering implications of internet-native financial services will be. It is on them to articulate this vision to their sheltered counterparts on the other side of that gate. In retrospect, it will seem inevitable that DeFi was to prevail, but in the moment, this burden behooves all of us to work with friends, families, and our professional networks to inform them of this tectonic shift happening. Bankers, regulators, fund managers; they’re people too, and there’s nothing to prevent them from being nodes in our peer-to-peer movement. Members of congress with laser-eyed profiles, anyone?
All of this is to say: we at BarnBridge have been spending significant amounts of time on these types of educational efforts.
Updated Documentation: The Integrations Team is focused on making it as seamless as possible for other projects to integrate BarnBridge smart contracts into their products.
Identifying Distribution Channels: The Operations Team is building out, and engaging with, a pipeline of different smart wallet / active strategy providers that could provide seamless on-ramps to BarnBridge applications.
Warming Up Traditional Finance: Crypto is scary. Applications that claim to address such fears are held to a high standard when it comes to vetting their legitimacy. Helping prospective depositors into SMART Yield and other future BarnBridge products understand the associated risks and how they need to think about their strategies is critical to gaining adoption.
Creating Content: I’ve spent the past week drafting a long-form primer on DeFi in general and BarnBridge in particular that’s intended for a non-crypto-native audience. As liquidity on our applications increases and easier on-ramps emerge, it is important to not lose sight of the fact that our applications could be the first time many of our future users will have interacted with DeFi. I hope to share it with the community in the coming weeks.
It’s exciting times here in the BarnBridge community as we roll into May, with AAVE Smart Yield originators well on their way, a jam-packed DAO vote shortly thereafter, and the continued timely development of SMART Exposure and SMART Alpha. Join us in our Discord if you haven’t yet!
- Max
Governance
This week saw the conclusion of the SnapShot vote on whether to seed the Bancor BOND pool with DAO tokens. With an overwhelming turnout and unanimous support, it passed resoundingly. Moreover, taking community feedback into account, the actual DAO vote will look to allocate 50,000 BOND, rather than the initial 25,000 requested, to the multi-sig wallet that will make the deposit. This will hopefully lead to a fruitful conversation with the Bancor Network community in regards to a BNT-subsidized liquidity mining program for the pool. Longer-term, the BarnBridge DAO’s accumulation of such BNT rewards would allow it to participate in Bancor community governance, which becomes especially appealing once you consider the need for liquid secondary markets for junior tranches across SMART Yield and eventually SMART Alpha (i.e., users want to be able to exit positions without incurring an exit fee). The vote to initiate this transfer of BOND will occur once the AAVE originators are live, so as to couple it with the vote to initiate BOND liquidity mining for said originators.
On that topic, we’ve seen a lively discussion in the forum over the past week regarding how to allocate BOND subsidies for SMART Yield juniors going forward, as the AAVE integration will bring on four new originators. We’ll look to have a SnapShot vote next week to determine community consensus around a specific approach that will then be executed by DAO vote thereafter.
Key Metrics
Congratulations are in order as BarnBridge snuck into the top three of DeFi Pulse’s derivatives category this Friday:
Prior to the day’s 5.21% decline, SMART Yield had reached its all-time high in total value locked, at a little over $56.1M. Now the question becomes, when do we hit 1,000 stakers in the DAO?
On SMART Yield:
On Liquidity and the DAO:
Disclaimer: BarnBurner is not an official BarnBridge publication and is not meant to reflect the shared views of its core team or BOND token holders. BarnBurner is an educational weekly newsletter meant to share updates on technical and governance-related happenings that occur within the BarnBridge ecosystem. The content herein is not financial advice and readers should not base any investment decisions off of it.
Thanks to Zach Owens for his branding work, and 0xBoxer for their dashboards 🤝