BondAppetite Stablecoin Peg Lost: Difference between revisions
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{{Case Study Under Construction}}[[File:Bondappetit.jpg|thumb|BondAppetite]]BondAppetite was a stablecoin backed by real-world yield generating bonds. The bonds that back USDap were | {{Case Study Under Construction}}[[File:Bondappetit.jpg|thumb|BondAppetite]]BondAppetite was a stablecoin backed by real-world yield generating bonds. The bonds that back USDap were reportedly stored by a licensed custodian in a stable jurisdiction. | ||
After multiple excursions below $1, the peg appears to have been lost at some point on April 18th, 2022. On June 8th, 2022, the protocol began an apparent buy-back of the tokens at a $0.97 USD price, however the token price remained far lower until December 14th, 2022. There have been no further updates to social media. | After multiple excursions below $1, the peg appears to have been lost at some point on April 18th, 2022. On June 8th, 2022, the protocol began an apparent buy-back of the tokens at a $0.97 USD price, however the token price remained far lower until December 14th, 2022. There have been no further updates to social media. | ||
== About BondAppetite == | == About BondAppetite == | ||
<ref name="bondappetit-9604" /><ref name=" | BondAppetite USD is a decentralized finance (DeFi) protocol that offers a stablecoin backed by real-world assets and a fixed periodic income<ref name="cryptorank-9595" /><ref name="bondappetit-9596" /><ref name="bondappetit-9597" />. BondAppétit aims to connect real-world debt instruments (bonds) with the Ethereum ecosystem<ref name="bondappetit-9604" />. It aims to solve multiple challenges such as high volatility and a lack of ties to real-world assets, limiting the blockchain integration with traditional finance<ref name="bondappetit-9604" />. It allows businesses to borrow money using bonds as collateral, accepting both fiat and cryptocurrency<ref name="cryptorank-9595" /><ref name="defibondstwitter-9601" />. The team behind BondAppetit includes experienced individuals such as the CEO Artem Tolkachev<ref name="cointelegraph-9607" />, who was previously the head of Deloitte Blockchain Lab<ref name="defibondstwitter-9601" />. Digital Fortress, an investment fund, has injected $350,000 into BondAppetit<ref name="bondappetitmedium-9611" />, and they are partnered with EAST.Finance, an enterprise-grade DeFi protocol that combines real-world and crypto assets<ref name="defibondstwitter-9601" />. The token of EAST.Finance will be partially backed by $USDap<ref name="defibondstwitter-9601" />. | ||
BondAppetite USD | BondAppetite USD (USDap) is a stablecoin that is backed by real-world assets in the form of outstanding debt secured by collateral in the form of bonds<ref name="bondappetit-9604" /><ref name="bondappetit-9598" /><ref name="defibondstwitter-9601" />. It is issued automatically through a smart contract when there is sufficient collateral available in the real world<ref name="bondappetit-9597" />. The governance and reward token of BondAppetit is $BAG, which is used for on-chain voting and collecting interest from bonds in dollars<ref name="defibondstwitter-9601" />. Investors can stake $BAG and earn income in $USDC stablecoin<ref name="defibondstwitter-9601" />. The BondAppetite protocol allows users to buy USDap and earn interest income in USDC by holding BAG tokens, which are backed by the bonds that support USDap<ref name="bondappetit-9596" />. Users can also stake their BAG tokens and earn rewards in USDC<ref name="bondappetit-9596" />. Built on the Ethereum blockchain, the protocol connects traditional debt instruments with decentralized finance, involving regulated securities and cryptocurrency broker/dealers<ref name="cryptorank-9595" />. | ||
USDap maintains a constant value of $1 and is issued only when sufficient collateral is available<ref name="cryptorank-9595" /><ref name="bondappetit-9597" />. Loans offered by BondAppetit are either secured by bonds or issued in exchange for bonds<ref name="defibondstwitter-9601" />. The protocol aims to provide transparency by storing the bonds with a licensed custodian in a stable jurisdiction and allowing anyone to check their availability online<ref name="bondappetit-9596" />. To ensure transparency, the protocol updates the price of real-world assets through trusted oracles such as Bloomberg and CBonds<ref name="bondappetit-9604" />. The protocol aims to provide public information on the collateral and real-time verification through publicly available oracles<ref name="bondappetit-9597" />. It aims to provide stability and connect with fiat cash-flows, offering a unique opportunity for investors to benefit from income generated by collateral and interest payments between 3-7.5% per annum<ref name="bondappetit-9597" /><ref name="bondappetit-9604" />. The price of USDap is automatically balanced using a basket of real-world debt obligations held by the protocol<ref name="cryptorank-9595" /><ref name="bondappetit-9597" />. The availability of collateral can be checked online<ref name="defibondstwitter-9601" />. Various issuers and their corresponding debt amounts, coupons, maturities, and ISIN codes are listed on the BondAppetit website<ref name="bondappetit-9598" />. They reportedly include various bonds from companies such as Delta Air Lines, Nexa Resources, Xerox Holdings, Ford Motor Co, Ecopetrol, and American Airlines<ref name="bondappetit-9598" />. | |||
BondAppetit is governed by its community, and early investors have the opportunity to participate and help grow the protocol<ref name="bondappetit-9596" />. The protocol also has a treasury to cover fees associated with intermediaries and the process of transferring funds between the fiat and crypto worlds<ref name="bondappetit-9604" />. The treasury is formed through the offering of governance tokens and allocation of the protocol's profits<ref name="bondappetit-9604" />. Additional capitalization can be achieved through the sale of governance tokens from the protocol's reserves or through private and public offerings of the tokens<ref name="bondappetit-9604" />. | |||
USDap also provided its own liquidity pools composed of liquidity flows from real-world assets<ref name="bondappetit-9597" />. When compared to other stablecoins like Tether (USDT), USD Coin (USDC), Dai (DAI), Binance USD (BUSD), and Pax Dollar (USDP), USDap offers unique features such as decentralized issuance, collateral backed by real-world assets, and crypto-liquidity backed by real cash-flows<ref name="bondappetit-9597" />. | USDap also provided its own liquidity pools composed of liquidity flows from real-world assets<ref name="bondappetit-9597" />. When compared to other stablecoins like Tether (USDT), USD Coin (USDC), Dai (DAI), Binance USD (BUSD), and Pax Dollar (USDP), USDap offers unique features such as decentralized issuance, collateral backed by real-world assets, and crypto-liquidity backed by real cash-flows<ref name="bondappetit-9597" />. The protocol also utilizes collateral assets in the form of fixed-income securities, preventing over-collateralization<ref name="bondappetit-9604" />. These collateral assets are part of the global corporate bonds market, which has a total size of approximately $128.3 trillion<ref name="bondappetit-9604" />. | ||
USDap was listed on platforms like CoinGecko<ref name="coingecko-9599" /><ref name="ath-9602" />, CoinBase<ref name="coinbase-9600" />, and CoinMarketCap, and users can subscribe to stay updated on protocol updates and new features<ref name="bondappetit-9598" />. The protocol also provides governance and offers resources such as a whitepaper, litepaper, GitHub repository, and documentation<ref name="bondappetit-9598" />. | The BondAppetit whitepaper provides detailed information on the history of bitcoin, stablecoins, and loan services<ref name="bondappetit-9604" />. USDap was listed on platforms like CoinGecko<ref name="coingecko-9599" /><ref name="ath-9602" />, CoinBase<ref name="coinbase-9600" />, and CoinMarketCap, and users can subscribe to stay updated on protocol updates and new features<ref name="bondappetit-9598" />. Liquidity provision is vital for the protocol's operation, and it initially provides its own liquidity pools on exchanges like Uniswap<ref name="bondappetit-9604" /><ref name="geckoterminal-9605" />. Users can interact in a community through Telegram<ref name="bondappetittelegram-9606" /><ref name="bondappetittelegram-9610" />. The protocol also provides governance and offers resources such as a whitepaper, litepaper, GitHub repository, and documentation<ref name="bondappetit-9598" />. | ||
"The main asset inside the protocol’s ecosystem is the stablecoin — BondAppétit USD (USDap). The price of USDap equals $1 at all times. The token is issued only if the protocol has sufficient collateral. Information regarding the collateral can be checked through blockchain at any time. The USDap price is balanced automatically based on a basket of real-world debt obligations that form part of the protocol’s assets." | "The main asset inside the protocol’s ecosystem is the stablecoin — BondAppétit USD (USDap). The price of USDap equals $1 at all times. The token is issued only if the protocol has sufficient collateral. Information regarding the collateral can be checked through blockchain at any time. The USDap price is balanced automatically based on a basket of real-world debt obligations that form part of the protocol’s assets." | ||
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"During the second development stage which is planned to start in 2022, BondAppétit aims to create a borrowing platform that will operate directly with issuers of fixed-income debt instruments. Therefore, providing access to traditional financial instruments in a fully decentralized manner. As a platform, BondAppétit will charge fees from the borrowers for each deal completed on the platform. Another feature that is vital for correct operations of the protocol during the second stage is the automated prediction system that will forecast asset price, calculate coupon payments and forecast possibility of default for each issuer." | "During the second development stage which is planned to start in 2022, BondAppétit aims to create a borrowing platform that will operate directly with issuers of fixed-income debt instruments. Therefore, providing access to traditional financial instruments in a fully decentralized manner. As a platform, BondAppétit will charge fees from the borrowers for each deal completed on the platform. Another feature that is vital for correct operations of the protocol during the second stage is the automated prediction system that will forecast asset price, calculate coupon payments and forecast possibility of default for each issuer." | ||
"BondAppetit was launched on April 5[, 2021]. In the first few days since launch, the volume of locked funds reached $8 million. In the first weeks since launch, the profitability of BondAppetit pools was hovering over 1,000% per annum, values which attracted many players from the DeFi market." | "BondAppetit was launched on April 5[, 2021]. In the first few days since launch, the volume of locked funds reached $8 million. In the first weeks since launch, the profitability of BondAppetit pools was hovering over 1,000% per annum, values which attracted many players from the DeFi market." | ||
| Line 43: | Line 35: | ||
"First governance initiatives. Starting from the first days since launch, BondAppetit has implemented a community governance system. All key decisions are passed through a general vote." | "First governance initiatives. Starting from the first days since launch, BondAppetit has implemented a community governance system. All key decisions are passed through a general vote." | ||
== The Reality == | == The Reality == | ||
| Line 76: | Line 53: | ||
!Description | !Description | ||
|- | |- | ||
|October 28th, 2021 | |April 18th, 2021 | ||
|A Nightmare on Stable Street | |||
|BondAppetit CEO Artem Tolkachev publishes "A nightmare on Stable Street" on CoinTelegraph. Central banks are closely monitoring the stablecoin market and looking to exert control over it, but decentralized stablecoins may offer a solution. Central bank digital currencies (CBDCs) have gained interest as a digital alternative to cash, allowing central banks to have more control over cashless transactions. While CBDCs are not intended for trading or cryptocurrency use, they serve as a controlled digital alternative to cash. Central banks are strict about regulating money, and they are likely to apply the same principles to existing market participants in the digital currency space. A bill introduced to the US Congress aims to apply banking regulations to centralized stablecoin issuers, potentially impacting the stablecoins currently available. This situation could pave the way for decentralized stablecoins to replace centralized ones. However, decentralized stablecoins face challenges in terms of stability and governance due to the absence of an issuer. Some decentralized protocols are attempting to solve this by delegating governance to the community and ensuring transparency and control over collateral. A potential solution could be a community-managed decentralized stablecoin backed by real-world assets, which could provide stability and transparency as an alternative to centralized stablecoins. Such solutions could significantly impact the stablecoin industry, offering traders a reliable alternative amid regulatory pressures<ref name="cointelegraph-9607" />. | |||
|- | |||
|October 28th, 2021 11:12:38 AM MDT | |||
|Digital Fortress Investment Fund | |Digital Fortress Investment Fund | ||
|A Medium post highlights | |A Medium post highlights an investment from Digital Fortress, a venture capital fund, of $350,000 in BondAppetit. Digital Fortress will receive 1.74 million BAG tokens. According to Evgeny Yudin, Director of Digital Fortress, DeFi services are expected to capture a significant share of the corporate loans and short-term liquidity markets, which are valued in the tens of trillions of dollars. BondAppetit aims to become a major player in the debt financing market by utilizing its hybrid model and experienced team with connections in both traditional finance and cryptocurrency. The protocol's stablecoin, USDap, is backed by 100% collateral that consists of stable assets from the traditional financial sector. The investment will be used to acquire bonds and increase the emission of USDap. Digital Fortress, headquartered in Cyprus, focuses on investing in innovative blockchain projects across various sectors with the aim of shaping the future of an open economy<ref name="bondappetitmedium-9611" />. | ||
|- | |- | ||
|November 5th, 2021 4:20:00 AM MDT | |November 5th, 2021 4:20:00 AM MDT | ||
| Line 174: | Line 155: | ||
== Technical Details == | == Technical Details == | ||
TBD | |||
== Total Amount Lost == | == Total Amount Lost == | ||
Revision as of 13:40, 28 June 2023
Notice: This page is a new case study and some aspects have not been fully researched. Some sections may be incomplete or reflect inaccuracies present in initial sources. Please check the References at the bottom for further information and perform your own additional assessment. Please feel free to contribute by adding any missing information or sources you come across. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.
BondAppetite was a stablecoin backed by real-world yield generating bonds. The bonds that back USDap were reportedly stored by a licensed custodian in a stable jurisdiction.
After multiple excursions below $1, the peg appears to have been lost at some point on April 18th, 2022. On June 8th, 2022, the protocol began an apparent buy-back of the tokens at a $0.97 USD price, however the token price remained far lower until December 14th, 2022. There have been no further updates to social media.
About BondAppetite
BondAppetite USD is a decentralized finance (DeFi) protocol that offers a stablecoin backed by real-world assets and a fixed periodic income[1][2][3]. BondAppétit aims to connect real-world debt instruments (bonds) with the Ethereum ecosystem[4]. It aims to solve multiple challenges such as high volatility and a lack of ties to real-world assets, limiting the blockchain integration with traditional finance[4]. It allows businesses to borrow money using bonds as collateral, accepting both fiat and cryptocurrency[1][5]. The team behind BondAppetit includes experienced individuals such as the CEO Artem Tolkachev[6], who was previously the head of Deloitte Blockchain Lab[5]. Digital Fortress, an investment fund, has injected $350,000 into BondAppetit[7], and they are partnered with EAST.Finance, an enterprise-grade DeFi protocol that combines real-world and crypto assets[5]. The token of EAST.Finance will be partially backed by $USDap[5].
BondAppetite USD (USDap) is a stablecoin that is backed by real-world assets in the form of outstanding debt secured by collateral in the form of bonds[4][8][5]. It is issued automatically through a smart contract when there is sufficient collateral available in the real world[3]. The governance and reward token of BondAppetit is $BAG, which is used for on-chain voting and collecting interest from bonds in dollars[5]. Investors can stake $BAG and earn income in $USDC stablecoin[5]. The BondAppetite protocol allows users to buy USDap and earn interest income in USDC by holding BAG tokens, which are backed by the bonds that support USDap[2]. Users can also stake their BAG tokens and earn rewards in USDC[2]. Built on the Ethereum blockchain, the protocol connects traditional debt instruments with decentralized finance, involving regulated securities and cryptocurrency broker/dealers[1].
USDap maintains a constant value of $1 and is issued only when sufficient collateral is available[1][3]. Loans offered by BondAppetit are either secured by bonds or issued in exchange for bonds[5]. The protocol aims to provide transparency by storing the bonds with a licensed custodian in a stable jurisdiction and allowing anyone to check their availability online[2]. To ensure transparency, the protocol updates the price of real-world assets through trusted oracles such as Bloomberg and CBonds[4]. The protocol aims to provide public information on the collateral and real-time verification through publicly available oracles[3]. It aims to provide stability and connect with fiat cash-flows, offering a unique opportunity for investors to benefit from income generated by collateral and interest payments between 3-7.5% per annum[3][4]. The price of USDap is automatically balanced using a basket of real-world debt obligations held by the protocol[1][3]. The availability of collateral can be checked online[5]. Various issuers and their corresponding debt amounts, coupons, maturities, and ISIN codes are listed on the BondAppetit website[8]. They reportedly include various bonds from companies such as Delta Air Lines, Nexa Resources, Xerox Holdings, Ford Motor Co, Ecopetrol, and American Airlines[8].
BondAppetit is governed by its community, and early investors have the opportunity to participate and help grow the protocol[2]. The protocol also has a treasury to cover fees associated with intermediaries and the process of transferring funds between the fiat and crypto worlds[4]. The treasury is formed through the offering of governance tokens and allocation of the protocol's profits[4]. Additional capitalization can be achieved through the sale of governance tokens from the protocol's reserves or through private and public offerings of the tokens[4].
USDap also provided its own liquidity pools composed of liquidity flows from real-world assets[3]. When compared to other stablecoins like Tether (USDT), USD Coin (USDC), Dai (DAI), Binance USD (BUSD), and Pax Dollar (USDP), USDap offers unique features such as decentralized issuance, collateral backed by real-world assets, and crypto-liquidity backed by real cash-flows[3]. The protocol also utilizes collateral assets in the form of fixed-income securities, preventing over-collateralization[4]. These collateral assets are part of the global corporate bonds market, which has a total size of approximately $128.3 trillion[4].
The BondAppetit whitepaper provides detailed information on the history of bitcoin, stablecoins, and loan services[4]. USDap was listed on platforms like CoinGecko[9][10], CoinBase[11], and CoinMarketCap, and users can subscribe to stay updated on protocol updates and new features[8]. Liquidity provision is vital for the protocol's operation, and it initially provides its own liquidity pools on exchanges like Uniswap[4][12]. Users can interact in a community through Telegram[13][14]. The protocol also provides governance and offers resources such as a whitepaper, litepaper, GitHub repository, and documentation[8].
"The main asset inside the protocol’s ecosystem is the stablecoin — BondAppétit USD (USDap). The price of USDap equals $1 at all times. The token is issued only if the protocol has sufficient collateral. Information regarding the collateral can be checked through blockchain at any time. The USDap price is balanced automatically based on a basket of real-world debt obligations that form part of the protocol’s assets."
"USDap is a stablecoin done right. Algorithmic automated issuance, real-world assets as collateral, and publicly available oracles for real-time collateral verification." "The bonds that back USDap are stored by a licensed custodian in a stable jurisdiction. Anyone can check their availability any time online. No single protocol with fiat collateral has this level of transparency." "The price of USDap equals $1 at all times and the asset is issued only with sufficient collateral."
"The borrowing process is built in the most convenient way for a borrower in order to ensure compliance with regulatory and financial requirements and the conclusion of an appropriate agreement. A borrower can receive funds in fiat as well as in crypto." "BAG holders receive coupon payments from bonds that back the USDap stablecoin. Interest income in USDC is distributed among token holders every quarter." "USDap has its own crypto liquidity pools which are partially composed of liquidity flows coming from real-world assets."
"BondAppetit is a decentralized protocol controlled only by its community." "There is no centralized issuer behind USDap — tokens are issued automatically by a smart-contract only when required collateral is available in the real world. Anyone can check collateral any time online at bondappetit.com/collateral. No single protocol with fiat collateral — neither USDC, nor USDT — has this level of transparency." "BondAppet is governed by its community. All token holders can participate in governing the protocol. Any member of the community with more than 1,000,000 BAG tokens can create a proposal."
Founder and CEO Artem is "[f]ormer head of the Blockchain Lab at Deloitte. For over seven years, Artem has been one of the key opinion leaders in the CIS region in blockchain and tokenization. Since 2011, he has been a lawyer by trade and an entrepreneur." CTO "Vlad has over 17 years of experience in web development. He launched and managed a number of major ICT products and services on the CIS market." "USDap represents a means of transferring value and it is defined as such exclusively by market participants. The token itself does not imply any obligations of the protocol, any of its participants, or third-parties."
"The price of USDap equals $1 at all times and the asset is issued only with sufficient collateral. USDap is 100% backed by yield-generating bonds. The bonds are stored by a licensed custodian in a stable jurisdiction. Anyone can check their availability any time online. The information is transmitted from the custodian and is digitally signed making data spoofing impossible." "In the event of a significant change in asset prices or a default, the protocol may initiate additional capitalization."
"During the second development stage which is planned to start in 2022, BondAppétit aims to create a borrowing platform that will operate directly with issuers of fixed-income debt instruments. Therefore, providing access to traditional financial instruments in a fully decentralized manner. As a platform, BondAppétit will charge fees from the borrowers for each deal completed on the platform. Another feature that is vital for correct operations of the protocol during the second stage is the automated prediction system that will forecast asset price, calculate coupon payments and forecast possibility of default for each issuer."
"BondAppetit was launched on April 5[, 2021]. In the first few days since launch, the volume of locked funds reached $8 million. In the first weeks since launch, the profitability of BondAppetit pools was hovering over 1,000% per annum, values which attracted many players from the DeFi market."
"First AMA session by BondAppetit founder Artem Tolkachev. Artem talked a lot about the development strategy, the regulatory environment, and other related issues. We recommend that you listen the recording of the AMA if you missed it or had joined late."
"First governance initiatives. Starting from the first days since launch, BondAppetit has implemented a community governance system. All key decisions are passed through a general vote."
The Reality
This sections is included if a case involved deception or information that was unknown at the time. Examples include:
- When the service was actually started (if different than the "official story").
- Who actually ran a service and their own personal history.
- How the service was structured behind the scenes. (For example, there was no "trading bot".)
- Details of what audits reported and how vulnerabilities were missed during auditing.
"You must consider the risk that BondAppétit may not be able to implement the Protocol Launch Phases described herein. You must bear in mind that the launch of Phase 2. RWA Collateralization and Phase 3. Direct Investment may be postponed or cancelled. Your investments are not secured. In case it is not possible to implement any of the phases of the BondAppétit protocol, you may lose all of your investments."
What Happened
After multiple excursions below $1, the BondAppetite peg appears to have been lost at some point on April 18th, 2022.
| Date | Event | Description |
|---|---|---|
| April 18th, 2021 | A Nightmare on Stable Street | BondAppetit CEO Artem Tolkachev publishes "A nightmare on Stable Street" on CoinTelegraph. Central banks are closely monitoring the stablecoin market and looking to exert control over it, but decentralized stablecoins may offer a solution. Central bank digital currencies (CBDCs) have gained interest as a digital alternative to cash, allowing central banks to have more control over cashless transactions. While CBDCs are not intended for trading or cryptocurrency use, they serve as a controlled digital alternative to cash. Central banks are strict about regulating money, and they are likely to apply the same principles to existing market participants in the digital currency space. A bill introduced to the US Congress aims to apply banking regulations to centralized stablecoin issuers, potentially impacting the stablecoins currently available. This situation could pave the way for decentralized stablecoins to replace centralized ones. However, decentralized stablecoins face challenges in terms of stability and governance due to the absence of an issuer. Some decentralized protocols are attempting to solve this by delegating governance to the community and ensuring transparency and control over collateral. A potential solution could be a community-managed decentralized stablecoin backed by real-world assets, which could provide stability and transparency as an alternative to centralized stablecoins. Such solutions could significantly impact the stablecoin industry, offering traders a reliable alternative amid regulatory pressures[6]. |
| October 28th, 2021 11:12:38 AM MDT | Digital Fortress Investment Fund | A Medium post highlights an investment from Digital Fortress, a venture capital fund, of $350,000 in BondAppetit. Digital Fortress will receive 1.74 million BAG tokens. According to Evgeny Yudin, Director of Digital Fortress, DeFi services are expected to capture a significant share of the corporate loans and short-term liquidity markets, which are valued in the tens of trillions of dollars. BondAppetit aims to become a major player in the debt financing market by utilizing its hybrid model and experienced team with connections in both traditional finance and cryptocurrency. The protocol's stablecoin, USDap, is backed by 100% collateral that consists of stable assets from the traditional financial sector. The investment will be used to acquire bonds and increase the emission of USDap. Digital Fortress, headquartered in Cyprus, focuses on investing in innovative blockchain projects across various sectors with the aim of shaping the future of an open economy[7]. |
| November 5th, 2021 4:20:00 AM MDT | Project Announced On Twitter | A Twitter post explains the BondAppetite project[5]. |
| November 9th, 2021 7:01:03 AM MST | H1 2021 Plans Released on Medium | The BondAppetite team releases a summary of the last 6 months[15]. "The last month marked six months since the launch of BondAppetit. The protocol is still at the MVP stage, but it has already passed several important milestones."[16] TBD more details. |
| December 5th, 2021 10:31:00 AM MST | Price Jumps Back To Peg | The price of USDap jumps from $0.841 USD back up to the peg at $0.996 USD[1]. |
| March 31st, 2022 12:38:00 PM MDT | Lowest Local Price | The USDap token ultimately reaches a price of $0.681 USD before rebounding[1]. |
| April 17th, 2022 7:30:00 PM MST | Peg Is Lost Again | The USDap token drops from $0.992 USD down to $0.903 USD, and continues to fall[1]. |
| April 22nd, 2022 4:34:00 AM MDT | Price Local Minimum | The price continues dropping until a level of $0.682 USD is reached before starting a rebound[1]. |
| April 22nd, 2022 6:19:00 AM MDT | Price Local Maximum | The price recovers to $0.844 USD, a peak before the price starts to fall back down again[1]. |
| April 30th, 2022 11:55:00 AM MDT | Price Local Minimum | The price collapses to $0.666 USD, before starting a rebound again[1]. |
| May 8th, 2022 4:15:00 AM MDT | Price Local Maximum | The price recovers to $0.841 USD, before starting to fall again without restoring the peg[1]. |
| May 9th, 2022 5:20:00 AM MDT | Kredika Maker Announcement | An announcement on the MakerDAO forum is posted with a description of a new Kredika platform[17]. |
| May 12th, 2022 6:30:00 AM MDT | Kredika Twitter Announced | BondAppetit announces Kredika on Twitter[18]. |
| May 26th, 2022 1:27:00 PM MDT | Price Local Minimum | The price completes it's collapse all the way down to $0.508 USD before starting a slight recovery[1]. |
| June 8th, 2022 3:44:00 AM MDT | USDap Buyback Procedure | BondAppetit mentions a new buy-back procedure for the USDap token[19]. This is the last update placed on the BondAppetit Twitter account[20]. |
| July 10th, 2022 5:00:00 AM MDT | Further Low Price | The price reaches a new low of $0.452 USD briefly[1]. |
| July 13th, 2022 4:26:00 AM MDT | Honourable Mention | Twitter user Proof of No Work mentioned this case along with other failed stablecoin projects in his Tweet[21]. |
| October 15th, 2022 5:00:00 AM MDT | Further Low Price | The price reaches another new low of $0.408 USD before recovering slightly[1]. |
| November 15th, 2022 4:19:00 PM MDT | Lower Price Shelf | The price collapses from $0.449 USD down to $0.281 USD before a very slight recovery[1]. |
| November 21st, 2022 4:04:00 AM MDT | Lowest Price Recorded | The USDap token appears shows a price of $0.172 USD[1]. |
| November 24th, 2022 9:01:00 AM MDT | Major Price Jump | Price climbs rapidly up to $0.785 USD[1]. |
| December 14th, 2022 10:33:00 AM MDT | Another Price Jump | The price climbs back up to $0.976 USD[1]. |
| December 22nd, 2022 4:40:00 AM MDT | Price Approaching Peg | The price has now reached $0.992 USD before starting to fall slightly[1]. |
| January 28th, 2023 1:00:00 PM MDT | Peg Restored | The price reached $1.026 USD from $0.985 USD, shooting past the peg[1]. |
| March 20th, 2023 | Token Listed As Inactive | The BondAppetite USD live chart on cryptorank.io lists the token as inactive[1]. |
Technical Details
TBD
Total Amount Lost
The total amount at risk has been estimated at $8,000,000 USD. The total amount lost is unknown.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Immediate Reactions
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
"BondAppetit is launching the USDap buyback procedure. The buyback procedure will involve the purchase of USDap/EUR on an OTC. We are offering a fixed purchase rate of 1 USDap = $1. The minimum amount for the transaction will be 30,000 USDap with the 3% transaction fee charged from our side (plus other fees charged by financial institutions)."
"In order to make an OTC transaction, you will be required to sign the relevant agreement and provide the documents requested for KYC procedures."
"The request for the transaction shall be made via email including the amount of the contemplated transaction (not less than 30,000 USDap), your personal details (including name/surname, wallet, and account information). Please note that we reserve the right to refuse to proceed with the transaction based on the provided information or change the type of the consideration for USDap indicated above."
"BondAppetite USD Price [as of November 4th, 2022]: $ 0.460" "USDap Total Supply: $1.09M"
Total Amount Recovered
While some portion of token holders were able to participate in the buyback process, participation was limited due to the required KYC procedures and discretionary nature of the redemptions. As a result, the price of the USDap token remained well below the $1 USD peg.
The USDap token appears to have ultimately recovered the peg.
Ongoing Developments
What parts of this case are still remaining to be concluded?
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
When using any third party custodial platform (such as for trading), it is important to verify that the platform has a full backing of all assets, and that assets have been secured in a proper multi-signature wallet held by several trusted and trained individuals. If this can't be validated, then users should avoid using that platform. Unfortunately, most centralized platforms today still do not provide the level of transparency and third party validation which would be necessary to ensure that assets have been kept secure and properly backed. Therefore, the most effective strategy at present remains to learn proper self custody practices and avoid using any third party custodial platforms whenever possible.
Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
Do not take customer assets and performing highly risky trades and investments without giving visibility to customers.
All aspects of any platform should undergo a regular validation/inspection by experts. This validation should include a security audit of any smart contracts, reporting any risks to the backing (of any customer assets, ensuring treasuries or minting functions are properly secured under the control of a multi-signature wallet, and finding any inadequacies in the level of training or integrity of the team. The recommended interval is twice prior to launch or significant system upgrade, once after 3 months, and every 6 months thereafter. It is recommended that the third party performing the inspection not be repeated within a 14 month period.
All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.
Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.
Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 BondAppetite USD Price Today (Official) | Live USDAP Price Chart in USD - CryptoRank.io (Nov 3, 2022)
- ↑ 2.0 2.1 2.2 2.3 2.4 BondAppetit Homepage (Nov 3, 2022)
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Stablecoin - BondAppetit Homepage (Nov 4, 2022)
- ↑ 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 Whitepaper - BondAppetit Homepage (Nov 11, 2022)
- ↑ 5.0 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 DeFiBonds - "BondAppetit is an Ethereum-based DeFi protocol for business loans. The loans are secured by bonds or issued in exchange for bonds." - Twitter (Nov 4, 2022)
- ↑ 6.0 6.1 Artem Tolkachev - A nightmare on Stable Street: Centralized stablecoins may be doomed - CoinTelegraph (Nov 11, 2022)
- ↑ 7.0 7.1 Digital Fortress Investment Fund Injects 350 000 Into Bondappetit DeFi Lending Protocol - BondAppetit Blog (Nov 11, 2022)
- ↑ 8.0 8.1 8.2 8.3 8.4 Collateral - BondAppetit Homepage (Nov 4, 2022)
- ↑ BondAppetite USD Price in USD: USDAP Live Price Chart & News - CoinGecko (Nov 4, 2022)
- ↑ BondAppetite USD (USDAP) ATH: $1.11 - ath.ooo Archive December 5th, 2022 11:43:16 PM MST (Nov 4, 2022)
- ↑ Bond Appetite USD USDap - CoinBase (Nov 4, 2022)
- ↑ Bond Appetite USD Price (USDap/USDC) on Uniswap V2 (Nov 11, 2022)
- ↑ Telegram: Contact @BondAppetit (Nov 11, 2022)
- ↑ Telegram: Contact @BondAppetit (Nov 11, 2022)
- ↑ BondAppetit: H1 2021 Results And Plans For The Near Future - Medium Archive November 9th, 2021 7:01:03 AM MST (Apr 18, 2023)
- ↑ H1 2021 Results And Plans For The Near Future - Medium (Nov 4, 2022)
- ↑ [KREDIKA] MIP6 Application: Pilot Vault for a portfolio of bridging loans secured with UK-based properties - Collateral Onboarding Applications (MIP6) - The Maker Forum (Nov 11, 2022)
- ↑ DeFiBonds - "Kredika is an end-to-end solution incorporating a technology platform and a legal framework for tokenising EU- and UK-based real world assets (RWAs)" - Twitter (Nov 11, 2022)
- ↑ DeFiBonds - "BondAppetit is launching the $USDap buyback procedure" - Twitter (Nov 11, 2022)
- ↑ DeFiBonds Twitter Account (Jun 21, 2023)
- ↑ ABettaMeta - "Yeah flexUSD, UST, DEI, TITAN, BitUSD, NuBits, Basecoin, One Cash, Dynamic Set Dollar, unified Stable Dollar, bDollar, Midas Dollar, Freeliquid, Stand Cash, BondAppetite, Empty Set Dollar, Coffin Dollar, OpenDAO, Wault Finance, BeanStalk, & DefiDollar holders are all doing great!" - Twitter (Jul 13, 2022)
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