bonds.org

Bonds.org is a pioneer in decentralized asset lending on Cardano, allowing enthusiasts to take full advantage of lending and borrowing opportunities.

Bonds.org offers low-cost financing to borrowers in need of liquid loans, allowing them to borrow without the need to liquidate their crypto assets; lenders can earn a substantial interest rate for meeting the liquidity needs of others.

The whole process consists of 2 parties engaging in decentralized way:

The lenders, who can lend their liquid crypto assets in return for an interest rate
The borrowers, who put up collateral (crypto funds/ NFTs) to secure a loan

The collateral serves as a guarantee - the lender is always safe in the thought that were anything to go wrong, the collateral will serve as a form of compensation.

The ecosystem functions similarly to P2P lending. Lenders and borrowers are connected via bonds.org platform. Lenders can allocate their crypto assets at custom rates. Borrowers can take out a loan for a margin trading or for personal use - with a commitment to repay the borrowed cryptocurrency at the agreed upon interest rate.

Visit bonds.org to learn more.

Project's development

V1 will create a completely new NFT-based market segment, enabling the use of NFT in acquiring loans;
V2 will facilitate the introductions of fractional lending, enabling orders to be split between multiple users;
V3 will introduce a lending pool model, pivoting away from the traditional peer-to-peer lending model

Industry

DeFi

Lending Protocol

Lending Protocols

Lending protocols in the DeFi world allow people to loan or lend money in a peer-to-peer manner, i.e. without the banking middleman. These loans are secured by the lender over-collateralizing the loan and the terms of the loan being managed in a smart contract. This gives the unbanked or those who have poor credit the ability to take loans, and it gives those with excess capital the opportunity to provide loans in a secure and trustless manner, and to earn income from them.

Over-collateralization means that the person receiving the loan locks up more than the value of the loan to secure it e.g. if they want to loan 100 they must lock up 150. How much they over-collateralize the loan by, and which tokens they use as collateral, depends on the platform. Some platforms only accept stablecoins, and other accept a variety of crypto assets. Typically, an individual uses one asset for collateral and takes a different asset as their loan.

An important factor in all loans is the interest rate and the length of the loan. These vary greatly by lending protocol, and loans can have fixed interest rates and periods, or infinite periods with interest rates that fluctuate throughout the loan period, fluctuating based upon the utilization rate of the pool of funds the loan was drawn from.

Importantly, the receiver of a loan is expected to maintain a certain ratio of collateral to loan, meaning that if the value of their collateral drops below that of their collateral to loan ratio, they need to add more collateral to keep the required balance. If they don’t keep up the collateral ratio they face liquidation and the loss of their collateral.

To "become the bank" those with idle tokens can deposit them into a lending protocol and earn from the interest derived from the loans their tokens are used to facilitate. Usually this deposit requires a lockup period of a certain length of time. Often, the longer the lockup period the higher the percentage return for the depositor.

Bonds.org offers low-cost financing to borrowers in need of liquid loans, allowing them to borrow without the need to liquidate their crypto assets; lenders can earn a substantial interest rate for meeting the liquidity needs of others.

Project's development

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