UNION and Bonded Finance Partner to Bring Lending Protocol Protection & Collateral Optimization to DeFi
UNION is pleased to announce our partnership with Bonded Finance, a platform for deploying high-yield financial instruments in DeFi that pushes the boundaries of open finance. The partnership will initially encompass UNION smart contract protection for user deposits on Bonded Finance’s lending platform — accompanied by the direct integration of C-OP into the lending platform to increase capital efficiency.
Bonded Finance is an algorithmic-based platform that aims to unlock dormant capital in crypto markets; primarily underserved altcoins. Bonded Finance’s issuances of smart instruments within DeFi include a unique lending protocol, collateralized indexes, and more. The project is entering the DeFi scene with its Bonded Accelerator Crypto Loan (Ionic) product, enabling liquid loans against altcoin assets to offer low-risk yield for LPs and dynamic LTVs paired with increased liquidity for borrowers.
The initial collaboration between UNION and Bonded Finance will focus on two aspects:
- UNION smart contract protection for Bonded Finance depositors.
- The integration of C-OP with Bonded Finance’s lending protocol.
Lending protocol protection is straightforward, and involves UNION’s protection pools for pricing risk and protecting user assets on Bonded Finance’s lending market. On the integration of C-OP, things get more interesting. Bonded Finance will be one of the first lending platforms to utilize C-OP, meaning that users will be prompted to purchase C-OP protection upon depositing into the lending protocol.
With C-OP, Bonded Finance users can significantly reduce their over-collateralization (OC) ratio for deposits, vastly improving capital efficiency while increasing collateral; with the collaboration enhancing user experiences across the board. The integration of C-OP is something of a first; invoking some forward-thinking products that offer utility in the near-term while providing an element of “future-proofing.”
“While DeFi is clearly the future of technical efficiency for traditional financial markets, it is still nascent in its journey of efficiently and safely leveraging its financial assets,” said John Liu, CPO of UNION, “Bonded Finance’s goal to unlock dormant capital through their Bonded Accelerated Crypto loans paired with UNION’s goal to optimize capital utilization in lending platforms with the use of derivatives is a perfect combination to accelerate DeFi’s maturation.”
For example, Bonded Finance is working on a product to help institutionalize altcoins via a collateralized index that produces a synthetic ETF. Consider the implications of boosting the capital productivity of altcoins using synthetic versions of lower-risk baskets for exposure. With the incorporation of C-OP, the Bonded Finance instrument could scale much more effectively. The fusion of the products delivers a net positive for DeFi. It highlights how mutual collaboration between DeFi projects can help churn out products that keep pace with a hyper-competitive market moving at warp speed, rather than explicitly focusing on building out individual ecosystems.
Paul Mak, CEO of Bonded Finance, states, “Risk management in crypto has become a hackneyed theme; stated often and rarely used. As early adopters, the space is loaded with individuals who prescribe to a motto akin to “ready, fire, aim.” This cowboy mentality spurs innovation but is fraught with peril. To provide a measure of protection for our collective future, we will embed UNION’s collateral protection directly with our protocols and smart instruments to offer some needed stability for the risk-taker as well as to help welcome the risk-averse.”
We look forward to engaging with Bonded Finance on the ideation and actualization of innovative products with the common goal of determining how we can best work together to boost capital productivity across an array of DeFi assets.
UNION is a technology platform that combines bundled protection and a liquid secondary market with a multi-token model. DeFi participants manage their multi-layer risks across smart contracts and protocols in one scalable system. UNION decreases the barriers to entry for retail users and lays the foundation for institutional investors. UNION’s full-stack DeFi protection is inclusive, composable, and brings battle-tested capital and pricing models from TradFi to the DeFi ecosystem.
About Bonded Finance
The Bonded platform was created to incubate and deploy experimental, high-yield, smart-contract driven, financial instruments that push the bounds of open finance. Bonding is an algorithmic model that aims to unlock, aggregate, and de-risk ~50 billion in dormant value distributed amongst untapped digital assets by allowing supporters of qualifying altcoin projects the opportunity to borrow against these assets or pool them and start earning.