How one DeFi protocol connects a $130-trillion market with DeFi

How one DeFi protocol connects a $130-trillion market with DeFi
Photo by Jezael Melgoza / Unsplash

Loans have always been a popular way among businesses to acquire capital for growth and expansion. As a result, the popularity of cheap borrowing led the global bond market value surge to a whopping $130 trillion. However, just like the 2008 financial crisis, the COVID-19 pandemic led banks worldwide to raise their interest rates and tighten the rules, effectively cutting off startups and enterprises from so much needed funds.

The consequences have not waited long. In the US alone, 20 million people lost their jobs amid failing businesses struggling to overcome the implications caused by the health crisis. Yet, hard times bring new opportunities. The rapid development of decentralized finance (DeFi) in 2021 paved the path to a new type of financial support tool. With no dependency on credit checks and lengthy approval procedures, decentralized lending protocols have the potential to let businesses borrow at a favorable level and continue operating and growing. BondAppetit aims to utilize the technology and build an all-around solution to answer the demand for cheap capital.

While DeFi space is highly rewarding, it remains risky. The crypto market is notorious for being volatile, meaning most market players in the lending niche utilize the practice of demanding overcollaterization and backing greater than the loan itself. For business owners, this means that the provided capital can be liquidated at very short notice, making them think twice before agreeing to terms.

What Is BondAppetit

BondAppetit is a startup founded in 2021 with a goal to provide corporate loans and short-term liquidity for business, no matter large or small, by connecting the world of bonds and crypto.

What is USDap

BondAppetit gives out loans in USDap. USDap is a native token backed by global yield-generating bonds. The bonds are kept in a licensed custodian, and funds can be checked at any time by anyone here. BondAppetit accepts collateral based on real-world assets, allowing the startup to offer potential borrowers better and more favorable terms when compared to other market players.

What is BAG

The bonds kept in the custodian can be sold if the holders of a native governance token BAG decide to do so. The decision is made through voting. Any holder with over 1 million BAG can initiate the governance proposal. BondAppetit aims to give out 100 million tokens over the course of 2 years.

Current Results

Since its inception, BondAppetit has been working on acquiring enough bonds to support its native token. Currently, bonds of Nexa Resources, Ecopetrol, Delta Air Lines, Ford Motor, Xerox Holdings, American Airlines are part of the startup’s portfolio.

Ten million BAG tokens have already been distributed among BondAppetit’s liquidity providers. The management board will give out another 65% to the community in an effort to transform the startup into DAO. BAG holders can stake their token over a 3-12 months period to earn 8% APY from bonds backing USDap.

Digital Fortress Investment fund has invested $350,000 into BondAppetit during the first investment round.

Future Plans

BondAppetit aims to launch a mass adoption of USDap token through locking partnerships with established players in the crypto and conventional financial worlds. EAST.Finance, a firm incorporated in crypto ecosystem Waves, became the first partner. The marketing team plans to reach agreements with more companies and launch a handful of marketing activities in 2022, with goals to acquire more collateral for USDapp and raise the liquidity. Such aims are necessary to validate the business model, upgrade the protocol if necessary, and build the best solution available in the market.  

Currently, BondAppetit utilizes Ethereum blockchain and has small pools on Binance and Waves. However, the development team is already working on the startup’s own blockchain and L2 solutions.

The grant program is also in the works. In a nutshell, it is a bug bounty and content creation program aiming to attract developers to find vulnerabilities within the ecosystem and creators interested in promoting BondAppetit in exchange for BAG tokens.  

Wrapping Up

DeFi is one of the answers to the rising global problem of cheap capital shortage. With lending protocols, businesses will have an opportunity to borrow, meaning growth and expansion. However, the crypto market remains volatile, scaring many to take the leap. With BondAppetit, the fear of crypto will become extinct.

BondAppetit team is made of professionals with decades of experience in the finance and technology fields who understand the importance of stability during uncertain times. The lending protocol developed by the team allows SMBs to borrow with low risk.

The solution is already scalable, and the main task for the team is to raise the supply of USDap. By connecting bonds and crypto, BondAppetit will make cheap capital available to any entity of any size.

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