Introducing Everbloom Finance
In this essay, we introduce Everbloom Finance, a research and development initiative based in Antwerp, Belgium. Everbloom develops a DeFi yield farming service that automates and optimises the deployment of digital assets in smart contract protocols.
In a previous blog post we articulated our vision and understanding of Decentralized Finance, a novel paradigm for finance on public blockchain infrastructure.
We are a group of researchers, programmers and blockchain enthusiasts who share the fundamental belief that public blockchains and its applications will transform and improve the lives of everyone around the world. They hold the potential to create a more egalitarian system without excessive barriers of entry and without censorship, enabling global economic participation. One of the leading drivers towards this positive future is the Decentralized Finance movement in which Everbloom boldly participates.
While it is still growing and developing, DeFi offers a bunch of opportunities for investment. Primarily it gains in size through the offering of economic incentives to its participants. Your digital assets that used to sit idle in secure cryptographic wallets can now be put to use productively as a Liquidity Provider in a plethora of financial applications. All while still being secured by public key cryptography and blockchain consensus, facilitated by smart contracts.
Liquidity Providers (LPs) provide necessary capital to smart contract protocols that enable them to operate more efficiently and expand their offering. In return, LPs receive a share of the fees that such protocols generate. These protocols are often run in a non-hierarchical way, spreading voting rights to its participants through token ownership. These tokens carry the power to vote on proposals that could influence the direction of the protocol. This form of community-based consensus on how the application evolves and adapts is completely new and a big shift away from centralised, top-down control that is omnipresent in normal businesses.
Because of the ease of integration and re-usability of financial primitives, a flourishing world developed in the two and a half year lifespan of DeFi. Our view is that this proces will continue to accelerate and gain more traction. Once a certain maturity is reached, we will see more traditional financial assets and players participate in this superior technology. We are anticipating this massive inflow into blockchain-based systems by acquiring in-house expertise and creating a product that has strong product market fit in an expanding market.
Everbloom offers specialised containers of assets called ‘vaults’. Each type of vault takes a different asset for which it will find the optimal way to deploy this asset in DeFi. Everbloom writes one or multiple strategies for each asset and manages the execution of transactions that need to happen to make these strategies work. The end-user is completely shielded away from all the complexities of managing such strategies and just enjoys the end-result, which is an increased balance of the token he deposited. Everbloom is a set-and forget solution for long-term investors who want exposure to digital assets while simultaneously capturing the best return on investment for these assets.
DeFi opened up this world where your assets can always be earning a yield and Everbloom offers this as a product and service without taking custody of your assets. Vaults are smart contracts that hold your assets transparently and move it around on-chain to other smart contract protocols. At no point can the team behind Everbloom take ownership of assets, nor do they need to. When the users wishes to withdraw his assets, the vault will automatically unwind the position and deliver what the user is owed. All accountancy happens on-chain and is verifiable and fair. We believe this approach to managing capital is fundamentally different from traditional models and we have the power of inter-operable smart contracts to thank for that.
In a first iteration Everbloom targets three main assets; Bitcoin, Ethereum and stablecoins (USDC).
In recent months we’ve seem the demise of what has been dubbed ‘CeDeFi', or a centralised version of participating in DeFi. Parties such as Celsius gathered user deposits and started lending, investing and sometimes straight up gambling to get the fixed yield they promised to users. This model is fundamentally broken and resulted in the collapse of Celsius, leaving many users behind with empty hands. We were happy to realise that we had taken the sustainable route of optimally capturing the opportunities that are present in the market instead of creating false promises and presenting an opaque system based on cheap marketing.
Everbloom is betting on the long-term future of DeFi by taking on the challenge of providing a hybrid version of yield farming optimisation and private banking. We do not hold assets for our clients as we believe this a crucial pillar of crypto’s security and confidence paradigm. Using public blockchain infrastructure and the guarantees that come with smart contract execution, we can deliver a non-custodial service without counter-party risk that manages assets efficiently and transparently.
The future is bright for a product like ours. While the world we operate in moves fast, our researchers are on top of their game. The development expertise we gather by creating and operating our product puts us in an excellent position to corner the market, especially once more traditional asset managers wake up and start realising this monumental shift towards on-chain finance. This experience and knowledge is difficult to acquire and even harder to buy. We are ready.