Newfangled Ethereum DeFi coin surges 600% in 24 hours after listing ๐จ This article is 4 years old...
Newfangled Ethereum DeFi coin surges 600% in 24 hours after listing
2 min read
Updated: Oct. 27, 2020 at 9:21 pm UTC
Despite the stagnation in the altcoin market, evidenced by Bitcoin outperforming Ethereum in its latest leg higher, investors are still throwing millions at new investments.
This much was made clear when BarnBridge’s native token BOND launched. The coin proceeded to rally exponentially despite only a small float of the coin being released due to vesting schedules.
BarnBridge is a new DeFi protocol focused on securitizing the space to entice more institutional players by reducing risks, or at least by allowing investors to hedge certain risks that weren’t possible to hedge for previously.
The startup closed a $1 million seed round in September and now counts Fourth Revolution Capital, ParaFi, Synthetix founderย Kain Warwick, and Aave founder Stani Kulechov as investors.
BarnBridge’s BOND token surges 600% in wake of listing
One of the most-hyped DeFi projects of the past week has been BarnBridge. As CryptoSlate previously reported, investors put in $175 million worth of USD Coin, DAI, and sUSD into the BarnBridge pool to farm BOND. Now, there is over $300 million in that one pool, potentially making this the biggest Ethereum DeFi yield farming pool (a single pool, not a protocol) ever.
At long last, BarnBridge’s native token BOND finally launched on Sunday due to the protocol’s unique distribution mechanism.
Trading began around $30-40, which meant that the seed round investors were already up 3,000 percent to 4,000 percent on their investment if they sold. Despite this, BOND kept on shooting higher.
From its starting price of around $30, the coin shot to all-time highs of $180 under 24 hours after it launched.
At $180, the fully diluted market capitalization of BOND was close to $2 billion, meaning that investors were seemingly pricing in high long-term expectations for the Ethereum-based coin and project.
This price may be a temporary illusion, though. Bobby Ong โ co-founder of CoinGecko, a crypto data and venture firm โ noted that the way the tokenomics work is leading to temporarily inflated prices:
“Only allowing farmers to harvest their proceeds at the end of each week (Monday, 8am GMT+8) has created very low circulation in the market during this first week and no efficient price discovery resulting in very low sell pressure causing price to move upwards.
In my opinion, supply in the market could have been smoothed out if the team had allowed for per block harvesting after Week 1 instead of allowing only harvesting at the end of each week.”
I've been observing @barn_bridge token price since it started trading on Monday morning. The price seems to be going only up and at $185, it is nearly 140x seed round price of $1.33. I am fully anticipating the price to go down next week so do be careful. Thread below ?
— Bobby Ong (@bobbyong) October 27, 2020
As Ong explains well, BarnBridge is a unique yield farm in that it releases coins on a weekly basis as opposed to a per-block basis.
This creates a natural step-like trend in the price action that may result in temporary price floors and ceilings.
Underlying DeFi fundamentals strong
Even if BOND does not catch your fancy, the amount of capital that is entering this new market indicates that the fundamentals of the DeFi space remain strong. Or, at the very least, this shows that investors see a positive long-term future for this crypto market segment.
As Spencer Noon, head of DTC Capital, recently observed:
Despite a month that saw most tokens fall 50% or more, #DeFi is *still* at ATHs with its most important indicators:
– TVL: $12.41B
– ERC20 Stablecoins: $14BDon't listen to the degens who burned out. Phase 2 of this #DeFi bull market will make this summer look like nothing.
— Spencer Noon (@spencernoon) October 22, 2020
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