What is Backed Finance? Backed Finance is a project that brings assets from the real world, specifically stocks, into DeFi by tokenizing them. Thanks to that, investors in DeFi can access securities assets easily.
So what is Backed Finance? Let’s find out in this article!
To learn more about RWA, you can read more articles below:
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- TProtocol V2 Review: AAVE Version in the Real World Asset (RWA) Space
- Summary of Potential Projects in the Real World Assets (RWA) Industry
Overview of Backed Finance
What is Backed Finance?
Backed Finance is a project in the RWA segment, allowing the encoding of securities assets into Tokens in DeFi. Thanks to that, investors in Crypto can invest in stocks through this platform.
To access and use Backed Finance’s services, users need to verify their identity. They also have to prove themselves hold assets of at least CHF 500,000 and have sufficient professional knowledge or experience. Hor hold liquid assets of at least CHF 2,000,000.
Assets that are stocks in the mainstream market will be encrypted into Backed Token (bToken). The supported token (bToken) is an ERC-20 token that represents ownership of structured product units. Supported tokens are currently available on Ethereum and other EVM compatible chains.
Users in some countries will be banned from using this service such as Iran, North Korea, Syria, United States of America. And some countries are not yet supported like most African countries except Mauritius and South Africa, and many countries in other regions.
Mechanism of action
Qualified investors use USDC to purchase shares in the form of tokenized Tokens (bToken). This can be seen as a way for them to invest in stocks indirectly. They can then sell their bTokens for Stablecoins or Fiat currency to lock in their profits or losses.
BToken is fully backed by underlying securities deposited at a Swiss custodian bank. Backed Finance partner with Chainlink and The Network Firm to verify reserve assets and issue independent proof of reserves attesting to the project’s underlying reserves.
Network Firm, a reputable auditing firm, has full access to Backed’s custodial account through the banking API endpoint and can independently check the underlying reserve status. This information is passed through an external adapter to Chainlink. Multiple nodes, all part of the Chainlink Decentralized Oracle Network, read the value transferred by the auditor and broadcast it on-chain, where it is publicly available to everyone.
Chainlink will update the supported proof of reserve every 24 hours, or sooner if there is a deviation from the previous value of more than 10%.
Like buying stocks in the traditional market, Issuing your bTokens will take two business days (T+2), but for many orders, especially smaller orders, issuance can be completed within minutes using Use the project’s working capital. VConverting your bToken to Stablecoin or fiat currency will take 3 business days (T+3).
Development Roadmap
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Core Team
Adam Levi Ph.D: Co-Founder
- In 2010, Adam graduated with a Bachelor of Science with a major in Electrical and Electronics Engineering. By 2017, he officially became a PhD in Theoretical and Mathematical Physics at Technion – Israel Institute of Technology.
- In 2017, Adam joined the founding of DAOstack and became the organization’s CTO.
- In early 2021, he and his colleagues founded Backed Finance and have been operating until now.
Roberto Klein: Co-Founder
- In 2000, Roberto officially graduated with a Master’s degree in Physical Electronics from Tel Aviv University.
- In 2006, Roberto worked as VP Products & Business Development at BSP Biological Signal Processing Ltd.
- In 2017, he moved to Legal & Regulatory at DAOstack.
- In 2021, he joined the founding of Backed Finance with Adam Levi.
Investors
May 1, 2021: Seed round received investment from funds such as Semantic, Stratos Technologies, Gnosis, Stake Capital, Exor Seeds, Mindset Vuntures for an undisclosed amount.
Tokenomics
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Exchanges
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Information Channel of Backed Finance
Summary
Backed is not a pioneering project in the niche of encoding stocks into Tokens to access the DeFi market. But it is a project that has a very safe way to protect stock assets, using banks in Switzerland and data that is continuously updated to the blockchain.
So I have clarified what Backed Finance is? Backed Finance cryptocurrency overview. Hope this article brings you a lot of useful information!
