New projects are arising all the while in Ethereum’s decentralized finance, or DeFi, ecosystem. The arena’s latest oncomer wants to bring what it hails as “smart bonds” to life on the most popular smart contracts platform.
On October 29th, the Australia-based Maple project announced its fruition in an introductory post that outlined the minimum viable product (MVP) that was the Maple protocol.
Maple’s so-called SmartBonds tokens can be used to create Ethereum-based crypto bonds with varying risk profiles, which in turn could lead to further interlinked — and tokenized — basket products.
As Maple’s builders explained on Tuesday:
“The Maple SmartBonds are ERC20 tokens, paid for with Dai, which are 100% collateralised by interest-earning crypto assets. Each issuance of SmartBonds is collateralised by a unique basket of collateral staked by the Issuer (borrower). The Issuer retains Equity in the collateral so they have skin in the game (normally 10–20%) while Investors buy the SmartBonds.”
“Our MVP is integrated with Compound, so the collateral assets are cDai, which is a digital asset earning interest for the holder,” the Maple team said, adding:
“Maple replaces lending collateralised by cash with lending collateralised by assets. DeFi needs this! It is not efficient for businesses to set aside cash when they want loans for growth. Maple lets businesses borrow against revenue-generating assets so they can reinvest the debt and grow. We are starting with digital loans as revenue-generating assets but the platform and technology can expand to subscriptions, profit sharing tokens and much more.”
The project further noted that the system could be used to create crypto banks, speculate on crypto bond interest rates, and create crypto bond ETFs, to name just a few possibilities.
Introducing Maple, DeFi's newest addition!
SmartBonds backed by crypto assets!https://t.co/yXgCapMXWC
— Maple (@maplefinance) October 29, 2019
Rising Bond Intrigue Around Ethereum in 2019
Generally speaking, bonds have been a growing topic in Ethereum this year.
That dynamic first kicked off back in April when major French bank Societe Generale (SocGen) rolled out €100 million EUR worth of bonds, which the institution dubbed “obligations de financement de l’habitat,” as security tokens on Ethereum.
“Many areas of added value are predicted, among which, product scalability and reduced time to market, computer code automation structuring, thus better transparency, faster transferability and settlement,” SocGen said at the time.
In related news, Germany’s top financial watchdog BaFin formally approved Fundament’s €250 million euro offering of real estate bonds tokenized on Ethereum in July.
“It has indeed been the first time we have approved a prospectus regarding blockchain-based real estate bonds,” BaFin noted.
Then in September, Spanish banking giant Banco Santander similarly leveraged Ethereum as public infrastructure in deployed the “first end-to-end blockchain bond” using the smart contract platform.
“The bank issued the bond directly onto the blockchain and the bond will also continue to exist only on the blockchain: a first step towards a potential secondary market for mainstream security tokens in the future,” Banco Santander said on the news.
DeFi Vogue: Synthetix, on the Rise, Entices VC
DeFi seems to be expanding in every direction, and some investors are seemingly taking notice.
For example, on October 29th the Synthetix project, which has been performing well in the rankings of DeFi Pulse as of late, revealed that venture capital firm Framework Ventures had “backed the project” by buying 5,000,000 of the platform’s SNX tokens “from the Synthetix Foundation’s treasury.”
— Synthetix ⚔️ (@synthetix_io) October 29, 2019
“The Framework team will also assist with the project’s long-term vision, short-term problem solving, and connecting Synthetix with influential individuals and teams,” the Synthetix team said.
Relatedly, Silicon Valley venture capital firm Andreessen Horowitz bought more than $200,000 USD worth of SNX earlier this month.