How It Starts
The vision behind Bender Labs
On October 21, 2020, we announced to the world that LGO, the company we founded in 2017 was getting acquired by Voyager Digital. Over the course of the past 3 years we had built, from scratch, one of the best institutional-grade exchanges in the crypto market:
- 80 institutional clients from 20 different countries and billions of USD traded
- A state-of-the-art technology
- Regulatory compliance in the US and in Europe — as one of the first ever licensed digital asset service providers in France
By signing this deal with Voyager, we brought LGO to a whole new level for the benefits of the token-holders that participated in the LGO token sale back in February 2018. It also gives us — the core team behind the company and myself — more time to take a step back and think about what we want to do next.
Prior to co-founding LGO, Fred and I met in NY in the first half of 2017. Fred was running his 4th company (and 4th success) in the AdTech space and I was still a math student at Columbia University. We were both fascinated by the rise of the cryptocurrency ecosystem that we had both started to follow a few years prior. Fred was particularly interested in the innovations brought by crypto in transparency and governance, while my thing was the prospects of disintermediation, automation and fair access.
A few months later, we created LGO to bring transparency in the world of cryptocurrency exchanges. We solved some of the most important problems at the time — which were market manipulation and front running — by using the blockchain technology to prove the transparency of our platform. We created a community of token-holders by launching the largest ICO to date in France, involved them in our governance and incentivized them to our success.
But we were still running a piece of a centralized infrastructure. An exchange that was running thanks to the operations of our team behind the scenes, and a very powerful technology that was only ours to see. A platform that could have been shut down if our banks refused to work with us.
One of the promises of blockchain, and all things decentralized, is to build an open internet of value, where anyone can control their money, and do with it what they please. A level playing field, where you only need an internet connection to access high yields and profitable assets — not a large bank account or a good relationship with your banker. A system that can be owned, and modified by its users, not its shareholders.
This promise is decentralized finance. Since Uniswap broke its first trade, DeFi has been all we could think about. Replacing our antiquated and expensive financial infrastructure with elegant and autonomous smart contracts running on public blockchains has the potential to redefine the way value gets created and exchanged around the world. It also solves some of the most current problems that the financial world is witnessing.
However, the decentralized finance vision presents many challenges.
How to think about regulatory compliance in a world where anyone can do what they want with their assets? It would be naive to think that one can achieve large scale of users without complying with existing laws and regulations — rules which have been made to protect the people and which will probably have to adapt to these new technologies.
How to think about security in a world where there is no recourse? If you send money to the wrong person, or get your wallet hacked, there is no one that will be able to refund you in the current DeFi space.
How to think about identity and anonymity in a world made of hexadecimal addresses? Given the importance of AML laws, not being able to identify who you’re transacting with is pretty much a big no-no for most regulators and governments.
The future is bright for DeFi, but only if we collectively solve these challenges — and many more.
This is why Antoine, Charles, JB, Cecile, Arnaud, Fred and I (in no particular order) decided to create Bender Labs. Bender aims to be the first self-driving bank. Or as we like to call it, a bank without bankers. In a self driving car, there’s no driver, and it’s the same thing for Bender. All the services offered by traditional banks (store your assets, buy and sell, lend and borrow, invest) are performed by smart contracts that we develop. These contracts are available 24/7, 365 days a year, in full autonomy and full transparency. The users of our code become our stakeholders, can benefit largely from the success of the Bender technology and can modify its protocols at its core. Anyone can access it with a cryptocurrency wallet and an internet connection.
This vision relies on strong technical foundations, the Bender Protocol: a cohesive set of smart contracts that each replicate a financial primitive and together replicate the services offered by a financial institution, but in a decentralized way. We are building on Tezos, as we believe it is the best smart contract technology to develop such a protocol: more secure, cheaper and importantly, much more nimble and agile.
Our first protocol, Wrap, will go live in its initial form somewhere between February and March. Wrap solves an important problem, which is the interoperability of assets between different blockchains. With Wrap, users will be able to use their Ethereum tokens on the Tezos blockchain, thereby bringing liquidity and assets to Tezos. You can read more about Wrap on our whitepaper, available here.
More importantly, Bender is an open-source project. We are looking to create a community of developers who will help us build Bender, and participate in its governance. If you’d like to join us, please reach out to firstname.lastname@example.org and follow us on Twitter
This is how it starts and this is just the beginning!
Hugo, for the Bender team.