DeFi Project Spotlight: B.Protocol, Decentralized Backstop Liquidity

Key Takeaways

  • B.Protocol attempts to solve the inefficiency of DeFi liquidations, which hamper the sector’s growth.
  • The project offers extra yield for users and makes liquidations more predictable for liquidators.
  • The protocol seamlessly connects to platforms like Maker, Compound, and Aave without requiring any actions from their side.
  • $1.5 million ETH was deposited on Maker through B.Protocol during the first 24 hours since launch.

Share this article

Decentralized crypto lending kickstarted the DeFi craze of 2020. The launch of Compound token COMP in June 2020 attracted the market’s attention and provoked the expansion of the DeFi ecosystem. As the prices surged, developers rushed to capitalize on the trend. 

Despite a wave of innovation, DeFi platforms are far from perfect. From hacks, poorly engineered financial incentives, and centralization woes, much can be improved. What’s more, these issues can grow to existential proportions during times of extreme price volatility.

To reduce help reduce at least one major risk, that of mass liquidations, B.Protocol is working to become DeFi’s first-ever decentralized backstop.

DeFi Inefficiencies Are Preventing Adoption

Most of the DeFi action currently happens on Ethereum. As new platforms emerge, the ecosystem’s composability increases. DeFi protocols and primitives become building blocks, allowing developers to mix and match different tools to create new features.

Composability is essential because DeFi isn’t flawless. Platforms have significant limitations and potential risks due to architecture decisions or the underlying network’s constraints. Ethereum-based applications mostly suffer from the network’s low scalability, which new primitives can help get around.

Ethereum still has a maximum of 14 transactions per second, which isn’t sufficient to support a vibrant DeFi ecosystem. As on-chain activity increases, so does the transaction cost because only so many transactions can be included in a…

Read More