Enter the Grove: Introducing Bamboo Money

Bamboo is a DeFi protocol on Binance Smart Chain that allows users to take out self-repaying loans which is effectively an advance on their yield farming proceeds that can never be liquidated.

We are inspired by the work done by the Alchemix team, whose innovations have increased capital efficiency for users, achieving an impressive $1B TVL (total value locked) within a month of launching.

By building on Binance Smart Chain, we are able to offer much faster and cheaper transactions along with more attractive yields for deposits.

How Does it Work?

The first version of Bamboo protocol will be launched with a synthetic stable coin, “bbUSD”, which will be mintable by depositing BUSD. Users deposit BUSD into the Bamboo smart contract to mint bbUSD, up to 50% the deposited amount of BUSD. That BUSD is then deposited into the **TBD** BUSD vault, earning auto-compounded yields.

As the yields are generated, the loan amount automatically gets paid down, and users can continue to borrow bbUSD up to 50% of the BUSD deposit amount or withdraw their BUSD collateral until the ratio is once again 50%.

If a user wants to repay their loan, they have two options: “Repay” and “Liquidate”. With Repay, users deposit either BUSD or bbUSD, which pays down their loan. Critically, BUSD and bbUSD are treated the same when repaying loans. Liquidate might make more sense if a user does not have BUSD or bbUSD available to repay, in which case the BUSD collateral is used to repay part or all of the loan.

Why Use Bamboo?

Bamboo gives users an advance on their future yield so they can put that capital to work now, rather than later. Starting at launch, we will incentivize a Pancakeswap pool between BUSD and bbUSD to ensure liquidity between the two pairs. Deep liquidity for trading from bbUSD to BUSD opens up a world of possibilities for what users can do with their Bamboo loans. Here are some example use-cases:

Access more capital

• Buying the dip. Deposit BUSD -> mint bbUSD -> trade bbUSD for BUSD -> use BUSD buy more crypto. This is especially valuable for users who want to maintain their hedged stablecoin positions.
• Farming. With Bamboo, users can mint bbUSD to take advantage of farming yields in the BSC ecosystem. There will also be a bbUSD pool for farming $BAM token, Bamboo’s revenue-capture token.

Finance purchases

• Get a Tesla. With Bamboo, users could take out a bbUSD loan to buy a Tesla and have it pay for itself.
• Deposit BUSD -> mint bbUSD -> trade bbUSD for BUSD -> Convert into fiat -> Buy a Tesla -> The loan will be automatically paid down from the TBD BUSD yields and over time, it will be completely paid off.

How Does bbUSD Maintain Its Peg?

There are three primary mechanisms that help bbUSD maintain its 1:1 peg to BUSD.

1. Liquid trading pair between bbUSD and BUSD on Pancakeswap. We will incentivize providing liquidity by distributing $BAM token rewards to participants in this pool.
2. bbUSD and BUSD are treated the same for repaying loans. So if bbUSD is ever trading for less than 1 BUSD, arbitrageurs could buy bbUSD and then use it to pay back a loan, knowing it will be treated as $1.
3. The Converter guarantees a 1:1 conversion from bbUSD to BUSD. Users stake bbUSD and over time, they will gradually be converted into BUSD. This is possible because the BUSD that is earned from the TBD BUSD vault is deposited into the Converter. This is perhaps the most complex/confusing mechanism in Bamboo’s system and we will go over it in-depth with examples in a future post.

Conclusion

We are excited to bring this unique DeFi primitive to the BSC ecosystem. Ultimately, our goal is to integrate with the broader BSC DeFi ecosystem to give as much utility as possible to users of the platform. Over the coming weeks, we will be releasing more information on our tokenomics, farming, and other ways for the community to get involved.

Join the community

Subscribe to the pages below for more updates, and information about Bamboo and its future roadmap.

Website: https://bamboo.money
Twitter: https://twitter.com/bamboo_money
Docs: https://docs.bamboo.money