How one startup connects a $130 trillion market with decentralized technologies

Diagram Blockchain

How one startup connects a $130 trillion market with decentralized technologies

A combination of a stablecoin and licensed custodian to serve the bond market.

The overall size of the global bond markets is $130 trillion, while the total market capitalization of the crypto market has surpassed the $2 trillion mark this year and keeps growing.

Businesses are always looking for easily accessible financing opportunities. Traditionally, large and mid-sized companies get funding through bank and bond financing. With its global reach and intermediary-free environment, the crypto market, decentralized finance (DeFi) in particular, could become a new source of funding in the near future.

However, in its current state, the DeFi lending market is not suitable for established businesses. Most protocols that lend crypto use it as collateral and require over-collateralization of the underlying loans.

And this is where BondAppetit comes in. 

BondAppetit is an Ethereum-based DeFi protocol for corporate loans. Its native stablecoin is fully backed by yield-generating bonds, which are stored by a licensed custodian with a real-time monitoring possibility. 

The BondAppetit protocol has a hybrid model and a strong team with the necessary experience and connections in both the traditional finance and the cryptocurrency markets. BondAppetit aims to become a significant player in the debt financing market.

Behind the scenes of the stablecoin

At the foundation of the protocol lies USDAP — a decentralized stablecoin fully backed by yield-generating bonds. The bonds are stored by a licensed custodian in a stable jurisdiction,  and their availability can be tracked at any time at the protocol’s website.

The information is transmitted from the custodian and is digitally signed, making data spoofing impossible. No single protocol — neither USDC nor USDT — has this level of transparency, and that’s why the demand for decentralized stablecoins with robust and transparent collateral is insatiable. Many institutions and protocols are in need of such assets.

In October 2021, BondAppetit raised its first investment round in the amount of $350,000.

Thanks to sufficient collateral composed of real-world assets, BondAppetit can hand out loans in USDAP under more attractive terms than other lending protocols. DeFi loans are usually secured by volatile crypto and issued against a collateral ratio up to 300% or more. In contrast, USDAP is backed by stable, real-world assets, eliminating the need for over-collateralization.

BAG is a governance and reward token, which is used to vote on-chain and collect the bonds’ interest in dollars. It is an ERC-20 token based on the Compound Governance system — a recognized industry standard with the highest rate of transparency and security. BAG token holders can stake their tokens for 3, 6 or 12 months and earn in USDC from bonds that back the BondAppetit stablecoin.

Plans and ambitions 

There are ambitious plans for this startup in the pipeline. These include an increase in the supply of USDAP, attracting more intermediaries and custodians, beginning handing out loans and launching on new blockchains and layer-two solutions apart from Ethereum (ETH), Binance Smart Chain (BSC) and Waves (WAVES). There are also plans to boost marketing efforts considerably as well as a grant program.

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