Risk Tokenization Protocol Launches on Polygon. Barn Bridge is the risk tokenization protocol, which launches on Polygon. The SMART Yield and the all-new SMART Exposure meant to offload the lending market yield risk and ERC-20 asset pair concentration risk.
Barn Bridge permits users to enter DeFi on their own terms with calibrated risk profiles. Polygon’s full-stack scaling is meant to make this faster and cheaper. The Smart Yield provides fixed and levered variable yield to depositors into lending markets like aave or Compound Finance.
Smart Exposure does away the concentration risk of your portfolio due to price fluctuations between the two assets. The ratio of investment is kept consistent by trading between the assets to maintain the ratio.
For clarity, Polygon is the first well-structured, easy-to-use platform for Ethereum scaling and infrastructure development. The core component is Polygon SDK, which is a modular, flexible framework that provides support for building and connecting Secured Chains like Plasma, Optimistic Rollups, zkRollups, Validium, etc. Standalone Chains like Polygon POS are designed for flexibility and independence.
Polygon’s scaling solutions have seen widespread adoption with more than 450+ Dapps, 350M transactions, and approximately 13.5M+ distinct users. Those who are Ethereum Developers, are already Polygon developers.
SMART Yield and all-new SMART Exposure applications are set to mitigate the risk of lending market yields and portfolio concentration risk, respectively in terms of inflation, market prices, cash-flow volatility, etc.
“SMART” for both the DApps means Structured Market Adjusted Risk Tranches, ensures the risk is distributed or adjusted in the form of Tranches. Every tranche is a pool of users with a defined risk profile with regards to their funds on a given money market like Compound or within ERC-20 asset pair position. There are two tranches in SMART Yield, viz. Junior and Senior.
The SMART Yield Junior Tranche is looked at as a higher risk providing levered return product; however, the Senior Tranche is lower risk with a fixed return. If the variable rate in the underlying debt pool will decrease, then the Junior Tranche will be salvaged to fulfill the Senior Tranche’s need of fixed return, and vice-versa. Thus, the variable rate of the underlying debt pool increases the excess of the fixed return of the Senior Tranche to the Junior Tranche.
SMART Exposure provides users with automated position rebalancing for any supported ERC-20 pair. The ratio is somewhere from 60:40 and it is fixed. And, this is irrespective of the price fluctuations, because the tokens are bought and sold to maintain the ratio. SMART Yield and SMART Exposure are focused on introducing new risk mitigation strategies to DeFi on Polygon.
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