The marquee asset of
is Bitcoin. The mildly informed have heard of Ethereum and maybe Ripple with it’s token XRP, but there are actually some 6000 listed cryptocurrency/blockchain projects with more showing up every day. As a new asset class, it is not without growing pains, and chief among them is liquidity. Wall Street has long decried the barriers to entry in crypto overall but has now, grudgingly perhaps, come to embrace Bitcoin and to a lesser extent, Ethereum. Still, their participation in anything is virtually non-existent.
So what about the rest of these 6000 plus projects? Without needed demand to induce active trading for their token has left founders watching a volatile asset while contending with nonplussed supporters. Without needed price discovery and the ability to easily move in and out of trade positions, these assets suffer and the space gets something of a black eye.
GREATER CHALLENGES
Resultant of this, capital is continually redistributing as investors are often as immature as the asset class itself. The lack of inflow-outflow has hampered countless startups who desperately need support to survive. This is a problem inherent to the space with early-stage investments as market-traded assets and the subsequent challenge they face in trying to build momentum.
Compounding the issue is the perception it creates for potential adopters. Many people are still not comfortable holding crypto assets and its reputation for hacks, manipulation, and illiquid markets only slow adoption. In the last two years, decentralized exchanges (DEXs) like Uniswap cropped up and injected some badly needed liquidity via the use of automated market makers. Other platforms like Kyber and Balancer have shown promise that these assets can be successfully traded as well. However, the supply of tokens still outweighs demand, and assessing the fundamentals of a project requires a level of education most don’t have.
A POTENTIAL SOLUTION
Their recent partnership announcement with Orion Protocol, a liquidity aggregator that finds the best price for tokens across some 700 exchange marketplaces, suggests they are seeking cutting-edge solutions to the hurdles that such a project might face.
Bonded decided to pursue this after extended experimentation and market observation. Identifying this reserve of non-performing capital is a significant opportunity. In a recent interview, Bonded’s CEO, Paul Mak, highlighted how otherwise great projects lose value, face relentless criticism, and, in some cases, have their communities wither and die. In Mak’s words, “our smart instruments enable us to repurpose unused capital to offer benefits to longer-term investors, teams, and even to reignite interest in projects that may have fallen off the radar.”
Bonded has also announced numerous partnerships with the likes of REN, Origin protocol, Matic, and most recently, the Orion protocol. Orion, as noted earlier, is particularly interesting as an aggregator of liquidity across the entire market that’s placed onto a single decentralized platform.
FINAL THOUGHTS
As the total locked value of DeFi crests twenty billion, it impossible to dismiss its value and utility or reduce to it a passing fad. Bonded focusing their DeFi energy onto less-trafficked parts of the crypto ecosystem highlights the breadth and depth of the market while addressing some limitations. Whether they’re able to execute on their vision to “make alts great again,” remains to be seen of course but what Bonded is doing—attempting to bring stability to help offset the growing pains of a burgeoning asset class is certainly not without merit. Crypto is notoriously tribal, but projects like Bonded are good news for anyone interested in helping it mature. In such a volatile marketplace, it could spell the difference between success and failure for some projects.