B.Protocol had an AMA with @CRE8RDAO on the 1st Nov 2021. This summary highlights the main points covered during the AMA session, including the latest updates of @bprotocoleth and which new platforms they are going to integrate with.
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@CRE8RDAO @bprotocoleth The team behind B.Protocol
@yaron_velner
🔹 Founder / Lead Dev - "Brain, muscles and vision" of B.Protocol
🔹 Was CTO of @KyberNetwork before this
🔹 Started SmartPool with @vutran54 as a semi-academic project, which evolved to become Kyber in 2017
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 🔹 Co-designer of the WBTC protocol with @BitGo team
🔹 Did development work on on-chain market-making tool created for DeFi
🔹 After Kyber in 2020, was consulting with pte companies, building liquidation bots for DeFi and CeFi
🔹 Realised liquidations in DeFi are broken
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo 🔹 Black Thursday came in March 2020
🔹 Liquidations on DeFi were not working when they were needed the most
🔹 Yaron decided to develop B.Protocol and build a permissionless backstop liquidity protocol for DeFi lending platforms
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka
🔹 Head of Growth and Ecosystem Dev in B.Protocol
🔹 Co-founder of @lazoozorg - decentralized car pooling dapp built on top of $BTC
🔹 In 2017, led a project by Toyota Research Institute and met Yaron
🔹 Joined B.Protocol before it went live
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg What is B.Protocol?
🔹 B stands for Backstop
🔹 Seeks to democratize the liquidation systems in DeFi through a Backstop liquidity protocol to unlock better capital efficiency in the entire DeFi ecosystem
🔹 This has quite a lot to unpack, so what does it all mean?
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg 🔸 Democratize liquidation system - everyone can take part and profit
🔸 Backstop Liquidity protocol - lending platforms get a stronger safety net because of a committed pool
🔸 Better capital efficiency - with better liquidation system, higher leverage can be used
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg Which chains will they operate in?
🔹 Currently B.Protocol is integrated on top of L1 lending platforms
🔹 Will be working on L2: 🔸@arbitrum 🔸@0xPolygon
🔹 And other chains: 🔸#BSC 🔸@FantomFDN
🔹 Protocol is blockchain agnostic and can work with any EVM compatible chains
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN Any measures with regards to smart contract security?
🔹 Each integration with platforms are audited
🔹 B.Protocol also has bug bounty on @immunefi and @HatsFinance
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance What is B.Protocol trying to solve?
🔹 Problem #1: Liquidations are very technical and lucrative - reserved for techy users and inner circle friends only
🔸 B.Protocol pools users' funds for liquidation
🔸 Anyone can deposit in the pool and no tech knowledge is needed
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance 🔹 Problem #2: Lending platforms have low leverage - not capital efficient
🔸 Having a committed backstop pool allows lending platforms to increase collateral factors
🔸 From x3 - x5 to x10 - x20 leverage
🔸 Liquidations will happen even in sub-optimal market conditions
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance 🔹 Problem #3: Fighting Miners Extracted Value (MEV)
🔸 No gas wars are needed to handle liquidations because there is a dedicated pool for such purposes
🔸 The profit that is otherwise taken by the miners will be passed to the depositors in the pool and shared with users
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance How does B.Protocol work?
For backstop pool depositors
🔹 Users deposit into a pool to gain rewards from liquidations
🔹 A liquidity mining program is used to incentivize and reward early depositors
🔹 Liquidations do not happen all the time but idle funds will earn a yield
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance 🔹 Once liquidations take place, the capital for paying back the debt is provided by the pool to the platform in return for a discounted collateral
🔹 Collateral is sold automatically back to the original asset used for the liquidation and deposited back to the pool
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance 🔹 All these is done automatically using B.Protocol's innovative Backstop AMM (B.AMM)
🔹 This will allow the capital to be recycled back to the pool for more liquidations to take place
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance For Integrated platform
🔹 Under the hood, integrated platform will give priority to the backstop pool to handle liquidations
🔹 Since liquidation will happen when needed, users can get higher collateral factors and lower liquidation thresholds
🔹 There are benefits for users:
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance 🔸 Unlocks greater capital efficiency - can employ higher leverage if needed
🔸 Users' collaterals will not be sold at prices far below the market price since there is a committed pool for liquidations
🔸 Ensures that the platform will not be insolvent
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance Which stage of development are they at?
Platform integration progress
🔹 V1 was launched in Oct 2020 - integrated with @MakerDAO and @compoundfinance
🔹 V2 was launched around Jun 2021 with @LiquityProtocol, @picklefinance and @Instadapp
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp 🔹 Others in the pipeline:
🔸 New MakerDAO vault
🔸 @MIM_Spell
🔸@HundredFinance via @arbitrum
🔹 Their newest integration with Hundred Finance is going to be announced soon
🔹 This is their first L2 integration with a multi-chain lending platform
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance Community development
🔹 B.Protocol DAO has funded their first Growth Squad with 25k $BPRO to grow and market the protocol
🔹 Made up of 3 veteran community members
🔹 Active community on all the major social media platforms like Discord, forums, Twitter and Reddit
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance Why should people use Liquity via B.Protocol?
How does Liquity work?
🔹 Uses a stability pool that functions like a backstop pool for liquidations
🔹 Users deposit $LUSD into the pool and funds from the pool will be used to liquidate unsafe Liquity Troves
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance 🔹 Once liquidation happens, users will need to rebalance their positions
🔸 They get $ETH from the collateral of the loan
🔸 Will need to sell the $ETH for $LUSD to deposit back into the pool again
🔹 Gas fees will take up a chunk of the profits, esp for smaller accounts
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance How does B.Protocol add value to Liquity users?
🔹 Automatic rebalancing of the liquidation in Liquity, using B.AMM
🔹 $ETH collateral will automatically be sold back to $LUSD and deposited back to the pool
🔹 Users will optimise $LQTY rewards - saves effort and gas
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance Any incentives to bring in more users?
🔹 2nd liquidity mining program is running to offer incentives for users of B.Protocol
🔹 Partnered with @UMAprotocol for UMA KPI options program
🔸 B.Protocol DAO deposits 90k $BRPO unto UMA KPI option contract
🔸 Mints 30k uBRPO
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol 🔸 uBPRO is an ERC-20 token that is distributed on each block to users of B.Protocol
🔸 KPI set by the DAO is to bring TVL up by at least $150M by mid-Dec
🔸 If TVL is at least $150M, each uBPRO can be redeemed for 3 $BPRO, distributing the full 90k $BPRO in the UMA vault
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol 🔸 If TVL is less than $150M, each uBPRO will be redeemed for only 1 $BPRO, so only 30k $BRPO wil be distributed to users while 60k $BPRO will be returned to the DAO reserve
🔸 Everyone is motivated to bring the TVL higher as the incentives are all aligned
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol Any competitors?
KeeperDAO
🔹 KCompound has a similar logic to v1, something that B.Protocol is doing for MakerDAO and Compound 6 months before they launch
🔹 Knew that they slashed their rewards. Why?
🔸 Reached a ceiling?
🔸 No value add
🔸 Too much dev work needed
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol Who are their competitors?
🔹 No active backstop protocols currently
🔹 KCompound (mentioned earlier) has a similar product to their v1
🔹 Other protocols are building products to avoid liquidations but these do not solve capital efficiency problem in DeFi
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol Any tokens for B.Protocol?
🔹 Fully decentralised since launch
🔹 Controlled and owned by users
🔹 6 months after mainnet launch, users voted to tokenize the governance
🔹 Now B.Protocol is governed by $BPRO holders
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol Challenges ahead?
🔹 Challenge is to show that their solution works even during severe market conditions
🔹 B.Protocol can cater to the full spectrum of DeFi users in the space
🔹 Still trying to raise awareness about the benefits of the protocol as liquidation is complex
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol Links
🔹 Substack article: thereadingape.substack.com/p/bprotocol-am…
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol 🔹 YouTube:
@CRE8RDAO @bprotocoleth @yaron_velner @KyberNetwork @vutran54 @BitGo @EKatchka @lazoozorg @arbitrum @0xPolygon @FantomFDN @immunefi @HatsFinance @MakerDAO @compoundfinance @LiquityProtocol @picklefinance @Instadapp @MIM_Spell @HundredFinance @UMAprotocol Like our work?
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