With recession concerns and dipping crypto prices reducing borrowing demand from the decentralised finance ecosystem, DeFi lender Porter Finance has announced the closure of its bond issuance platform:
Twin Forces Drive Lack of Demand for BI
The Ethereum-based lender allowed decentralised autonomous organisations (DAOs), such as Porter’s Ribbon DAO, to issue convertible bonds to raise funds in return for paying yields to users. However, the lack of demand for fixed-income DeFi products has meant that the Porter Finance bond issuance platform was in operation for only a month.
Porter Finance founder Jordan Meyer cited the competitive rates of traditional finance and the lack of institutional fixed-income DeFi adoption as the twin forces driving low demand for bond issuance. Meyer has also stated that his company is “no longer willing to take on the legal risk associated with bond offerings”:
Ribbon DAO, the protocol that helps users access crypto-structured products for DeFi, which was using Porter Finance to issue its bonds, is still bound by its promise to repay yields to users. The closure of Porter Finance’s first-of-its-kind service follows the implosion of other DeFi companies such as Celsius.
Other DeFi Movements
Last month’s hot topic was the DeFi sector with DeFi Yield Protocol (DYP) up by a notable 107 percent in a week. At the time, DYP was trading at US$0.43. According to Coinbase, DYP will phase in alongside five other Ethereum-based altcoins – PARSIQ, Elastos (ELA), HOPR, MATH and ALEPH – in trading pairs with Tether once liquidity conditions are met. The six altcoins will be grouped under the exchange’s new ‘Experimental’ title.
At the same time, the combined CeFi and DeFi crypto lending platform Alkemi Network announced a partnership with hardware wallet maker Ledger. The collaboration will mean that Ledger’s 1.5 million users can earn yields with their ETH, USDC or wBTC via their wallets’ interfaces. The combination of CeFi and DeFi allows users to maintain full control of their assets.