Spotlight Series: Bondly

By Raymond Reijnders, Analyst.
December 3, 2020–5 min read.

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One of the undeniable major talking points in the blockchain industry of 2020 has been decentralized finance or ‘DeFi’. Besides the expected ebb and flow of the market, markers for the overall growth of DeFi have been on a steady upward trajectory since mid-to-late June.

DeFi is not going away and will continue to mature throughout 2021 as a niche sub-section of the broader blockchain landscape.

One new and emerging name in the world of DeFi is Bondly Finance (‘Bondly’). The Polkadot ecosystem — exciting in and of itself — will power the future of the Bondly tech environment.

Bondly facilitates interoperable, transparent, and portable swaps that essentially make everyone and everything into a marketplace!

In this post, we introduce Bondly Finance and cover some of the key components of this exciting startup.

Over the past several years we’ve seen countless attempts at tackling the issue of trust, or lack of it, in both real-world and digital transactions. In attempts past we have seen often overly complex and convoluted solutions muddying the waters for “trustless digital transactions”. This in turn leads to a product which can’t provide a simple and easy to use trustless state for transacting.

Limiting factors for adoption of prior solutions include:

  • A lack of buyer and seller protection, and
  • The ability to simply void or revoke without an intermediary.

Bondly takes advantage of the growing digital economy, a booming sector since the early-2000s. In more recent history we’ve witnessed massive companies rise to prominence who all have something in common — they offer their products as digital-only or through a Software-as-a-Service (‘SaaS’) model.

Bondly marries blockchain with this cosmic shift from offline to online and introduces a solution for trusted, transparent and portable swap transactions between parties in any marketplace. Turning chat apps into decentralized exchanges (‘DEXs’) and social media accounts to token marketplaces.

Two simple examples of potential use cases within Bondly’s product suite include:

  • Crypto-asset over-the-counter (‘OTC’) transactions, and
  • Enablement of non-fungible token (‘NFTs’) or more generally digital-asset marketplaces, e.g. transacting social media accounts like Twitter, Instagram, YouTube… even TikTok.

Basically, any digital purchase would historically require a level of trust between two parties and Bondly steps in to remove this friction point.

In the following section we will outline Bondly’s core product lineup and its application in today’s crypto-environment.

BONDSwap

Despite the rapid growth of digital content, Bondly posit that no reliable, decentralized, peer-to-peer marketplace for the purchase and sale of digital goods exists. Bondly is solving this product-gap through the creation of a decentralized cross-chain swap architecture that is fully atomic called ‘BONDSwap’.

BONDSwap allows users to directly exchange (P2P) digital or intangible goods through cryptographically secured OTC trades.

BONDSwap solves issues seen in traditional escrow outlets such as:

  1. Large dollar-denominated trade sizes and resulting high fees,
  2. High counterparty risk, and
  3. Lack of support for digital goods.

BONDSwap also addresses some of the problems encountered using existing cross-chain (atomic) swaps through the use of Polkadot’s Bridge modules and contracts. This allows Bondly to interoperate across different blockchains.

The process is further simplified by each entire transaction taking place within Bondly’s own infrastructure. Users can even generate a link for the transaction which can be shared with the other party via any medium — making chat rooms become decentralized marketplaces.

BONDSwap Summary

  • No restrictive transaction size limits, low fees.
  • Using Polkadot Bridge modules and contracts for a smoother experience.
  • Easy to use, easy to share.

BOND DEX

Throughout the latter half of 2020 decentralized exchanges have undoubtedly taken not only significant market share from their centralized counterparts but also lessened their relevance as the DEX markets have developed.

BOND DEX is a cross-chain decentralized exchange which taps into the BONDSwap architecture and underlying Bondly tech. The exchange is blockchain agnostic, allowing for anonymous trades between completely separate chains, using an in-house developed liquidity engine. For additional security, liquidity pools are provided with price data from trusted third-party oracles including Chainlink.

Due to this cross-chain interoperability Bondly presents an innovative approach to the current DeFi “token swapping” model enabling transactions between native pairs without any wrapped derivative prerequisite.

BOND DEX Summary

  • Anonymous swaps with non-wrapped native cross-chain assets.
  • Blockchain agnostic interoperability.
  • In-house developed automated liquidity engine.

BONDProtect

‘BProtect’ is Bondly’s smart-contract-based marketplace payment platform which allows for the easy and safe exchange of digital goods or services.

BProtect offers a notable set of capabilities including:

  • Escrow,
  • Recurring payments, and
  • Payment protection.

It can be used as an individual through the BProtect GUI or integrated into an online marketplace as a third-party integration service.

The core motivation for the use of BProtect focuses on the purchase, sale, and transfer of digital assets including cryptocurrencies and NFTs.

Existing marketplaces can integrate the BProtect infrastructure, set their own deal fees, and not need to worry about maintaining custody of assets themselves.

BONDProtect Summary

  • Feature-rich marketplace payment platform.
  • Enables trustless escrow, recurring payments, and payment protection.
  • Easy integration into existing online marketplaces.

Besides the three core products discussed (BONDSwap, BOND DEX, and BONDProtect), Bondly also dives deeper into the possible use cases of NFTs. The team has already launched two lines of community-focused trading cards.

These cards do not only reward the owner with extrinsic rewards in the form of (vested) BONDLY tokens, they also provide owners with a set of distinct intrinsic motivators, including:

  • Premium platform access,
  • Direct communication with the team,
  • Access to exclusive gaming tournaments, stories and anime connected to the cards as a form of lore.

Additional notable features of the Bondly ecosystem:

  • A reputation system, which can be either anonymous or public.
  • A secondary protection system in the form of (cryptocurrency) collateral posting requirement by sellers.
  • A dispute system where in the case of a dispute between a buyer and seller an independent third party will arbitrate.

Conclusion

Bondly Finance is an exciting new name taking on relevant challenges in the world of DeFi. Their core product lineup presents an opportunity to capture buyers and sellers across the DeFi landscape all within one ecosystem.

With an experienced team, we are optimistic about the Bondly project.

Bondly’s BONDLY token begins trading on December 8th, 2020.

Hillrise Capital is an independent research and advisory firm exclusively focused on blockchain startups and crypto-assets.

Hillrise Capital has purchased BONDLY tokens.

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