Many decentralized protocols launched this year have tasted roaring success while a few have even sent down the dumps because of poor fundamentals. It is apparent that when a protocol on launch does well, its real test starts after the launch. It is when the price correction actually happens and the real prospects of the project are right in front of us.
Another new and fresh concept seems to be taking all the glory away from popular projects. A new DeFi asset claiming to be a tokenized risk protocol is getting all the attention it wants from crypto traders after it has skyrocketed 140 times the price of its initial offering price and all this in just 24 hours!
The project we are talking about is Barnbridge that is garnering all the limelight as its governance token BOND has seen a growth explosion from its value in the seed round at $1.33 to reach a new peak at $185 on its launch date itself. This rise is unimaginable for a new protocol and represents a 13,800% increase.
Barnbridge is an ambitious project that wants to change the present and concurrent variable interest rates being offered by a present lot of DeFi platforms. Its whitepaper claims that it has envisioned products that will structure yields into fixed rates. Users can then choose to invest based on what their risk appetite is because Barnbridge has worked on a plan in which interest rates are split into different risk portions.
“Upon sending the funds to participate in the pool, the user decides the risk tranche. Assume the entire loan has an interest rate of 10%. The senior tranche tokens are sold for a fixed interest of 5% with the junior tranche having a variable interest rate. Assuming the entire portfolio has a return rate of 10%, for a total of 100 DAI, after repaying the senior tranches 5% interest on their investment of 700 DAI first (35 DAI), we have 65 DAI of proceeds for the junior tranches.”
CoinGecko co-founder Bobby Ong tells his followers that it is the right time for booking profits in a tweet. He has warned that next week the price could be coming down as a part of the correction and warned traders to do the needful.
Bobby Ong has further said that BOND’s system of releasing the proceeds to the users at the end of every week has created a nullification in the supply and its rise in price is related to the selling pressure. Apart from that, he has suggested that BOND is presently overvalued with a market cap running in billions.
“At $160/BOND, Barnbridge will have a Fully Diluted Valuation of $1.6b. In my opinion, this is too high for a project that does not have a working product, although the idea & team seems promising. When Week 2’s harvest is ready from Pool 1 & 2, farmers may decide to take profit.”
At the time of writing BOND is trading at $132.83 going down by 13.2% in the last 24 hours.