Bank of Chain. The next generation of Decentralized Banking (DeB).
An overview of the ‘’Chain Bank’’ protocol. How it works, its present and future.
After seeing what decentralized finance (DeFi) is in the previous article, let’s go deeper into what the Bank of Chain (BoC) is and how it relates to the DeFi ecosystem.
What is BoC?
BoC is the first decentralized bank (DeB). This multi-chain yield optimizer provides the best long-term near risk-free return; it helps ordinary investors obtain a wealth management tool on the blockchain, seeking to articulate the best of traditional banks with the best DeFi protocols.
BoC brings together the best of both worlds, delivering higher returns than traditional banks but making them more stable than most DeFi protocols. DeFi unlocks high returns, and BoC makes them sustainable; in other words, in decentralized finance, it is possible to obtain high returns, but they tend to have high volatility due to risk; BoC manages to make those returns sustainable.
In what sense is BoC bank-like?
It features a similar user interface, offering personal bank statements and one-click deposit/withdrawal facilities. BoC also provides equivalent services to banks such as wealth management and lending. This last one is under development and pending implementation.
BoC issues high-yield certificates of deposit that function like banknotes: $ETHi and $USDi are interest-bearing tokens whose parity is pegged to $ETH and USD correspondingly, they are stable, fully liquid, and fully backed since for every ETHi minted, there is one $ETH deposited BoC’s vaults, and for every USDi minted, there is one USD deposited as well.
How does it work?
To start earning returns, you simply connect your wallet (Metamask or Wallet Connect) and deposit stablecoins into the BoC protocol, it will start generating interest immediately.
BoC only accepts asset-backed stablecoins, as they are more secure and stable, and currently include $DAI, $USDT, and $USDC, although there are plans to add many more stablecoins that meet the same requirements.
By depositing any of these three stablecoins, you receive $USDi as a certificate of deposit, pegged to USD. You can also deposit $ETH and receive $ETHi the same way as $USDi, and since $ETHi is pegged to ETH, it is also stable.
In turn, these certificates of deposit will increase the amount in themselves and generate the return BoC provides as APY to depositing users. Moreover, the return is compounded, i.e., reinvested automatically, expanding the investment base on which it will generate further returns.
The returns come from Automated Market Maker (AMM) fees, governance rewards, and lending fees, meaning that BoC invests the money in these strategy types within secure and reliable protocols, and the returns generated are fully transparent and displayed in the BoC app dashboards. There you can see, in real-time, not only the investment strategies and the percentage invested in them but also the protocol performance history and vault details.
How is BoC better than other DeFi protocols?
BoC seeks to provide solutions to the common challenges and limitations of other DeFi protocols, such as yield volatility, operations complexity, extensive knowledge of the field required to operate, non-transparent strategies or performance, circular dependencies, and impermanent losses, among others.
In this way, BoC offers sustainable returns, full transparency on all operations and investment strategies or fund allocation, due diligence performance, and, most importantly, super-simple procedures for all, becoming BoC’s one-click compound wealth management platform the best way for newcomers to enter the crypto and DeFi ecosystem.
How is this possible, i.e., how can BoC achieve a secure and nearly risk-free approach?
The BoC platform connects protocols within the crypto ecosystem, including Automatic Market Makers (AMMs), lending protocols, and yield aggregators. The protocol has a reliable risk control procedure; accessing high-quality strategies can be 3–5 basis points higher than other USD-managed funds, with the potential to attract millions of dollars in investment. Stablecoins, blockchains, and strategies used by BoC are rigorously selected and tested. The BoC algorithm provides optimal funds allocation services combining the two principles of maximizing returns and diversifying capital risks.
Furthermore, BoC achieves a secure and nearly risk-free approach primarily through selecting well-vetted protocols such as AAVE, Alpaca, Balancer, Convex, Curve, dForce, DODO, Pancakeswap, Quickswap, Synapse, Sushiswap, Uniswap, and Venus. Also, through attack prevention by incorporating the Chainlink Oracle; and fully automated yield optimization with portfolio rebalancing and audits by trusted third parties, which is currently ongoing.
In addition, BoC avoids including insecure mechanisms such as circular dependency ones, algorithmic stablecoins (which are not asset-backed), or risky third-party bridges, and presents a low risk of impermanent loss, due to the way deposit vaults work.
BoC’s present and future
The BoC team is working hard to launch the new governance token soon ($BoC), which will bring new features and benefits for participating in the protocol’s Decentralized Autonomous Organization (DAO). Besides that, there are several advances and improvements planned in the roadmap, such as connecting more blockchains (Fantom, Algorand, Solana, etc), adding alt-coins farming through lending, smart contract insurances (Nexus Mutual), and developing other services offered in traditional banks, but without intermediaries and complications.
BoC is making daily progress towards its medium and long-term goal of offering personal banking services such as transfers, exchanges, deposits/withdrawals, and money lending/borrowing; payment solutions such as payroll and subscription services, pay-as-you-go compatibility, cross-border settlement, and even the issuance of its debit card; and institutional services such as meta-governance, principal-protected notes for non-fungible tokens (NFTs), DAO treasury management and currency forward contracts.
In this way, BoC aims to complete the path toward a fully-fledged decentralized bank (DeB).
Currently, BoC functions as a yield aggregator and is working to develop the rest of the envisaged functions. The protocol is compatible with Ethereum Virtual Machine (EVM) and is already connected with Ethereum, BNB Chain, and Polygon networks.
In the future, we will see BoC as a disruptive platform playing a vital role in transforming the ecosystem around the crypto-investments industry and decentralizing various sectors.
Learn more and start earning on the BoC Platform
📲 Connect: Keep up to date with all the latest developments along the way by staying tuned to BoC’s networks.
👁 Explore: Start earning with BoC now! The lending facility will be launched soon.
🧠 Learn: Find out more about BoC by accessing the protocol documentation.
👥 Community: Join our Discord and Telegram groups to participate in the latest community discussions on BoC.
🗳 Governance: Follow BoC governance profiles for more news on the upcoming DAO and all proposals.
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