With the recent announcement that BonqDAO will be the second project to participate in our participatory capital-raising platform, Fundrs, our Co-Founder and CEO Rachid Ajaja spent some time with the leadership team at Bonq and our community to chat about the upcoming Liquidity raise and provide a deep dive into Bonq, how it works and the impact it will have on DeFi.
Bonq is the second project to take advantage of our peer-to-peer, fully decentralized capital-raising platform — Fundrs. Their liquidity raise started on Thursday 15th December and will continue until 12th January 2023. You can learn more about Bonq and how to participate here.
To mark AllianceBlock’s first liquidity raise on Fundrs, our CEO and Co-Founder Rachid Ajaja jumped on Telegram and had a chat with Bonq’s experienced leadership team with Co-Founders Delia Sabau (CEO), Micha Roon (CTO) and Michal Bacia (Token Economist).
They discussed the impressive backgrounds, the problem that the team saw in the space, and how Bonq is a relevant solution. They then dove into how Bonq works as a liquidity platform, what the BEUR is, how the stability mechanisms work, how Bonq is using Fundrs, and finally, how our community can participate in the liquidity raise.
If you want to learn even more about Bonq, we published a deep dive article on the project which you can find here and Bonq has provided a Protocol Overview which you can find here. Below you will find the AMA’s transcript and will enjoy a deeper look into this exciting innovation in DeFi!
Note: The following transcript is curated for clarity, but you can also follow the discussion on our Telegram here.
…
Rachid Ajaja, CEO and Co-Founder AllianceBlock: Hello everyoneeeeeeeeeeeee, huge to be here again!
No Mercy AMA starting now!
Thanks everyone for being here, this is a super exciting AMA. Bonq is a project that I have been following since its inception. The team is not only awesome but also very capable given their track record.
I want to thank you guys from BonqDAO for taking the time for this unique AMA.
Let’s start with an introduction from Michal Bacia, Micha Roon, and Delia Sabau.
What is your background? How did your crypto journeys start? And from where was the Bonq idea born?
Delia Sabau, CEO and Co-Founder BonqDAO: Thank you Rachid. Really excited to be here today with all of you when we launch Bonq.
Micha Roon, CTO, and Co-Founder BonqDAO: Thank you Rachid for having us. My interest in crypto started in 2015 when I discovered Ethereum. I started learning about the stuff and moved to be a full-time smart contract developer in 2016.
After 3 years of engineering management, I became the CTO of EWF and that is where the idea for Bonq emerged.
Rachid: Oh wow, you are an OG :)
Michal Bacia, Token Economist and Co-Founder BonqDAO: Hi Rachid! Great to be here! We’re very excited to finally be launching today.
I’m an economist with a degree in Managerial Economics and I’ve been practicing token economics hands-on since 2017. I’ve worked with enterprises such as Kudelski Security and Lufthansa, in addition to many crypto projects including Energy Web. I’m a token economics mentor for Brinc and Hypernest web3 startups.
And now I’m a co-founder of BonqDAO and the Chief Economist.
Micha: When I reconnected with Michal Bacia, with whom I had worked in 2018, the discussion about a multi-collateral stable coin started. And after some time it appeared that we could not leave that idea alone and had to start our own project.
It took 18 months from the idea to launch. We’re writing history today.
Delia: Just a quick intro of myself. After spending 2 decades in the traditional finance world, starting in banking, and consumer credit risk, then moving to investment management working for Blackrock, and most recently for a global hedge fund, I decided to join the Bonq’s founders to build a self-sovereign financial ecosystem. My interest in crypto started in 2018 when I started getting involved in a few blockchain projects mainly on the trading and investment sides.
I couldn’t be more proud of how it all came together in the end. Today we reached a huge milestone and I want to thank everyone who supported us, believed in us, and provided feedback during the last year.
Michal: Micha and I realized that many crypto projects struggle with liquidity for their native tokens and there are crypto holders who can’t find low-risk, sustainable yield strategies. This is how the Bonq liquidity protocol was born.
Rachid: Excellent. I can see the synergies with your experiences.
Micha, you are the tech guru with huge architecture design and blockchain experience with a lot of experience in different blockchain tech. Michal, you are the economist expert with deep knowledge of the token economy and this is much needed in the space and Delia, you are the Quant and the financial expert with deep experience.
I would call you the three Musketeers as the synergies are perfect to be able to build the perfect protocol that has a unique USP and value proposition.
So now, as you know, Bonq is the second project leveraging Fundrs so this AMA is very special to us. Also because of the value that Bonq will bring to the space as a whole which we will touch upon later in this AMA.
Everyone is asking the same question: What is Bonq?
Delia: In a nutshell, Bonq is a liquidity platform that allows users to borrow against their own tokens and allows protocols to diversify their treasuries and create deep, protocol-owned liquidity for their tokens at zero interest.
At its core, Bonq offers over-collateralized lending with a 0% interest rate. It accepts whitelisted collateral and issues BEUR which is a stable coin paged to EURO.
What it does is, Bonq opens up the debt market to a wide variety of DeFi protocols and their communities, not only the blue chip ones.
Rachid: This is super interesting, this brings me to another question; there are multiple lending protocols in the DeFi space, the most known being AAVE, Compound, Liquidity, Convex, and much more. How would you compare them and what would be your competitive advantage?
Delia: Besides 0% lending, Bonq’s true power comes from unique features such as automated bots, automated liquidation, and a responsible Risk Management system that we just implemented. In our view, the risk model is going to be the backbone of Bonq’s long-term success because it would allow us to be different from all the other lending protocols and accept a wide range of collateral assets without adding stress to the overall lending protocol. Keep in mind that Whitelisted tokens on the Bonq platform could affect the protocol and its stable coin BEUR at its core so it is crucial to build a robust and systematic risk model.
Rachid: Something you said about risk management speaks a lot to me. Most people lose money because of the lack of risk management, and this is something that is lacking in the DeFi space.
Now, Delia, you are speaking to my heart. Quantitative DeFi risk management is the future.
Michal: Unlike the other lending platforms, Bonq provides self-sovereign liquidity. This means that users don’t need to borrow external capital from any 3rd party and pay recurring interest. Bonq helps them access the liquidity of their own assets in a non-custodian, permissionless way. Bonq uses BEUR, our native, over-collateralized stable coin backed by on-chain assets.
Rachid: This is awesome. I can see the benefit for AllianceBlock first and foremost but also to all other crypto projects and protocols to be able to manage their treasuries well without having to put their token in the market, this is really YUGE!
You spoke about BEUR Delia and Michal. Is BEUR just another algorithmic stable coin and subject to the same risks as Luna and other algorithmic stablecoins? I know the community has been asking this and I would love to know a bit more about BEUR, how it works and why it stands out from anything that has existed until now.
Michal:
Michal: Let me explain. Most importantly: BEUR’s value is anchored *outside* the Bonq protocol, so BNQ (our utility token) can’t be used as collateral.
There’s always more collateral backing BEUR in the troves than there is BEUR in circulation.
Delia: And we have automated liquidations so most of the systematic risk is reduced.
Rachid: This is super interesting. This brings me to something more geeky; how would you compute the over-collateralization ratio in a way that includes proper risk management and prevent the users from being liquidated?
Michal: Bonq protocol is completely non-custodial. We don’t have a treasury, so there’s no risk of running out of any treasury that is supposed to keep the peg.
The price of the collateral is provided by an oracle, Chainlink for USDC, or Tellor for ALBT. We can’t influence that.
The collateralization ratio is Price in EUR * Collateral / BEUR
Micha: If you deposit 1000 USDC worth 0.9 EUR = 900 EUR of collateral and you have 450 BEUR of debt. The TCR (Trove Collateralization Ratio) is 200%.
Rachid: This is unique as I haven’t seen it in the market, and lately I saw this super interesting article where a trader found a way to attack a lending protocol in a super smart way. Here is the link for those that are interested in checking.
This incurred a loss to AAVE which had to use its treasury to pay it back.
Given what you said, I do believe that you are not subject to the same attack, which for me is easy to prevent with proper risk management.
The cool thing with this Micha is that anyone is able to understand how it works, and I do believe this is important.
I have another geeky question for you guys:
The future in my opinion in the lending protocols is to be able to dynamically compute and adjust the over-collateralization ratio given the market condition. I know that no one in the market is doing this. Is this something that is on your roadmap?
Michal: In our UI, this is where you can find the collateral ratio for your trove for each token
Micha: Yes, we even gave the bot a name: Owen the accountant. This will be implemented in a smart contract in V2 of the Bonq protocol, which will include automation. A note about that is that the fees paid for automation will also be paid to the BNQ stakers
Rachid: This is yuuuuuuge over-collateralization ratio, nice!
That’s really awesome, and actually this perfect transition to the utility of the BNQ token. Can you say something about this Michal?
Delia: We posted this blog this morning talking about the BEUR stability price.
Rachid: I read this blog and it’s very detailed. I advise all of our community to take a few minutes and go through it.
Michal: 1. BNQ is needed for whitelisting new tokens as collateral.
2. BNQ stakers receive all the fees from the protocol.
3. The fees are paid to BNQ stakes as cash backs, not “dividends”, so stakers need to use the platform to benefit from the fees.
4. Cashbacks can be used to repay your BEUR debt in your trove.
Rachid: This is the virtuous circle. I really like what I am reading.
If I understand correctly:
- I put collateral
- I receive BEUR
- I pay a 0% interest rate
- I receive BNQ as cashback
- I stake BNQ that can be used to repay BEUR
Is this correct Michal?
Michal: Almost 😉 Here are the steps:
- I put collateral
- I receive BEUR
- I pay a 0% interest rate
- I earn BNQ on Funders by providing liquidity and later I can buy some on a DEX
- I stake BNQ that can be used to repay BEUR
Rachid: Bonq chakalaka
Michal:
Rachid: Let’s speak now about the Fundrs Campaign. BonqDAO is the second project on Fundrs, however, it is unique because there is no fundraising but everything will be done through Liquidity Mining which you call #selfsovereignliquidity which gives an equal opportunity for anyone to able to receive $BNQ. Could you please tell us a bit more about this campaign? How does it work? and why should people participate?
Michal: Yes, we don’t want to sell BNQ at launch to anyone. We want people to be able to learn how to use Bonq, learn how they can earn sustainable yields, and earn some BNQ in the process.
Micha: We set up the liquidity pools on Uniswap V3 and use Arrakis to get an LP token for Uniswap V3 positions. In order to provide liquidity, you need to mint yourself some BEUR and provide the USDC or DAI counterpart. The risk of impermanent loss is minimized.
Rachid: Actually, this brings me to a community question:
“For the campaigns, we need BEUR. And we can mint BEUR by depositing your assets in a trove on Bonq. Can you please clarify how to do that? And when will we be able to do it?”
When will we have access to this?
Micha: You can access the app on this website to get started. You can find more info in our Telegram here
Michal: The pools are already deployed on Polygon and today at 5 PM CET Bonq DeFi terminal will be live, so that users can deposit their USDC/BEUR and DIA/BEUR
Rachid: Oh, awesome. I really love the UI, super cool and easy to understand, and I see it’s public now, wouhouuuuuu!
defiterm 👀, hugeeeee
For everyone, we are really proud that rALBT will be used outside of Fundrs. This shows the importance of rALBT in our global ecosystem and how everything is connected.
Michal: Important info for all Fundrs! Please remember to bridge your rALBT from Ethereum or Avalanche to Polygon using the Fundrs app.
Rachid: +1
I have one last question for you Delia: What is happening next? Do you have any nuggets to share with our community?
PS: we luuuuuuveeeee nuggets
Delia: Roadmap:
Rachid: Excellent
I saw a few pools have been created through Arrakis for uniswap v3 on Polygon. Can you share more about this?
Delia: Q422 is almost over and we will be live today. However, 2023 will be a busy year launching our premium bots and v2 risk management contracts. Sudden changes in the Market Risk Score trigger changes in risk parameters for individual tokens such as MCR and Borrowing Capacity. We will implement decentralized governance, go multi-chain and create an RWA framework.
Rachid: That’s awesome, thanks, Delia.
Micha: Here are the Arrakis addresses and the related Uniswap V3 Pools
symbol: “usdc”,
token: “0x2791Bca1f2de4661ED88A30C99A7a9449Aa84174”,
unipool: “0x0066ead4772591b62dC72929AEF13F7DDE1B4374”,
arrakis: “0x388E289A1705fa7b8808AB13f0e0f865E2Ff94eE”,
symbol: “dai”,
token: “0x8f3Cf7ad23Cd3CaDbD9735AFf958023239c6A063”,
unipool: “0x0792130d3c17c58B6320a4aeb70DF8b5eE559ECc”,
arrakis: “0xA1Dd21527c76BB1A3b667149e741A8B0f445FaE2”,
symbol: “weth”,
token: “0x7ceB23fD6bC0adD59E62ac25578270cFf1b9f619”,
unipool: “0xb14900b0eE6E50dD535e02Ac2195c37690407a15”,
arrakis: “0x8B8533471920231Acca16104a0c81fA50D8C9a53”,
symbol: “wmatic”,
token: “0x0d500B1d8E8eF31E21C99d1Db9A6444d3ADf1270”,
unipool: “0x4f5f469781cE3A294EE22759B0c4822F0C6178A1”,
arrakis: “0xF006abD9f9874712b76a4c5E43bc7e5030817982”,
symbol: “walbt”,
token: “0x35b2ECE5B1eD6a7a99b83508F8ceEAB8661E0632”,
unipool: “0x559Bd861FAEB53605bfF0FEe54500f07912c31cB”,
arrakis: “0x3ae7b5b0A44157a6092b676537B1e7d829577e39”,
Rachid: Awesome, and happy to say that we have created our pool WALBT BEUR which is already live.
So how can our community learn more about you guys and BonqDAO? Can you share all the links?
Michal: The step-by-step guide to using Bonq is here
Micha: You can find out more about me and follow me on social media:
Michal: This is our website
Our Discord
Our Telegram
This is the official Twitter
Rachid: This didn’t feel like one hour. This was a huge AMA. Thank you very much for all the valuable information that you have shared with us.
For all our community, I am sure you have a lot of questions. Please join https://t.me/Bonqch and ask all of your questions. The team will move over there and answer you guys.
Thanks, everyone for being here. I really enjoyed this AMA.
Michal: You can find me here
Delia: More about me here
Michal: Thanks Rachid for having us here and for all your support on our journey so far!
Delia: Thanks Rachid!
About AllianceBlock
AllianceBlock is building seamless gateways between TradFi and DeFi by remedying issues in both spheres and linking them more closely. They see the future of finance as an integrated system in which the best of both worlds can work together to increase capital flows and technological innovation.
They are building this future by bridging traditional finance with compliant, data-driven access to new decentralized markets, DeFi projects, and ecosystem-scaling tools such as funding and interoperability. As such, they are building a next-generation financial infrastructure that aims to provide regulated financial entities worldwide with the tools they need to access the DeFi space seamlessly.
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