Ribbon Finance
Crypto Networks

Ribbon Finance (RBN) – Crypto Derivatives Platform

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Key Takeaways: –

  • Ribbon Finance is a decentralized protocol that offers sustainable and risk-adjusted yield on crypto assets.
  • The platform offers a range of investment strategies, including Theta Vaults, Earn Vaults, and Treasury Vaults.
  • Ribbon Finance is the first Ethereum-based platform that offers crypto-structured product protocols.

Decentralized Finance is swiftly revolutionizing the financial landscape. It provides a range of options like decentralized exchanges, lending & borrowing platforms, unique earning opportunities, and more. Yield farming and staking are the leading products of this industry that attract the most users.

The users can obtain massive returns by investing in different products. But the process is a bit complex and yield farming requires a lot of monitoring because it doesn’t have a specific lockup period. So, the investors always have a risk of losing their returns. Ribbon Finance solves this problem along with a few others by automating the process.

What is Ribbon Finance?

Ribbon Finance is a decentralized protocol designed to offer sustainable and risk-adjusted yield on crypto assets. The platform offers Ribbon Finance Vaults where users can deposit their crypto tokens to earn passive income consistently. Anyone can take advantage of options and derivatives trading even if they don’t have any understanding of these products because Ribbon Finance uses smart contracts to automate its functions.

Ribbon Finance offers a range of investment strategies allowing users to improve the risk-return profile of their crypto portfolios.

  • Theta Vaults – Theta Vaults use covered calls to reduce the downside risk. It automatically reinvests the earned yield back into the vault to generate continual, passive income. ETH and wBTC are the common tokens that users invest in these vaults. But the platform offers this facility for a range of other crypto tokens.
  • Earn Vaults – Earn Vaults provide earning opportunities in both bull and bear markets. These vaults generate yield by incorporating a combination of lending and options.
  • Treasury Vaults – Treasury Vaults are designed to facilitate the decentralized autonomous organizations that want to use their own native tokens to generate passive income. These vaults eliminate the need for borrowing new tokens or selling the native tokens of a DAO. The DAOs can set custom parameters for their specific treasury vaults because these vaults aren’t available to the public.

Ribbon Finance Brief History

Ribbon Finance was introduced by Julian Koh and Ken Chan in 2020. The platform was introduced with the goal of providing a user-friendly experience for crypto holders to earn a yield on their crypto assets. Theta vaults were introduced in 2021 to attract a wider audience. Also, the team raised around $10 million through several funding rounds in 2021 and 2022.

Pantera Capital, Dragonfly Capital, and Paradigm are some of the leading investors that supported this project in the early stages. The Earn Vault product was introduced in 2022 that offers additional earning opportunities for investors. Ribbon Finance has the potential to revolutionize the way people generate yield on their crypto assets.

Benefits of Ribbon Finance

Ribbon Finance is the first Ethereum-based platform that offers crypto-structured product protocols. Thus, it establishes interoperability among other Ethereum-based protocols.

Attractive ROI – The reason why Ribbon Finance is getting popular among investors is that it offers advanced features to generate wealth. For example, the users can earn yields on BTC, ETH, and other cryptocurrencies using Theta Vault. This feature enables users to enjoy compound rewards by automatically reinvesting their returns. The best part is that the platform ensures the security of the capital amount while generating yields.

Top-notch Security – The platform has gone through several audits conducted by third parties. The platform’s lending pool protocols and smart contracts are thoroughly reviewed by ChainSafe and Open Zeppelin. Moreover, it’s an open-source product easily accessible to anyone who wants to review the system.

How Does Ribbon Finance Work?

Ribbon Finance simplifies smart contract execution and options trading to streamline the yield generation process for the average investor. Ribbon Finance uses Opyn, an Ethereum-based general options protocol, to facilitate options trading. The users need to obtain oTokens to enjoy this facility.

The users can set the strike asset, strike price, derivative’s expiration time, and put/call option to customize their automated derivatives strategy using oTokens. The users can then transfer their crypto assets into Ribbon vaults. These vaults primarily save the time that investors usually spend on planning and monitoring investment strategies.

The Theta vaults automate the complicated process once they deposited the tokens. The vaults mint oTokens by depositing their balance in Opyn vaults. Then a blind auction is organized at the Paradigm starting with the minimum price. The bidders can obtain these tokens from the auction by setting the highest bid.

The vaults then collect the tokens from the Paradigm and invest them in the upcoming weekly call options. The working mechanism of put-selling calls is pretty much similar to that of covered calls. The only difference is that they automate the put-selling strategy.

Ribbon Finance Tokenomics

RBN is the native token of Ribbon Finance that users deposit to generate yields through smart contracts. It also provides governance rights to the token holders. With a circulating supply of 535.7 million tokens. RBN has a market cap of $99 million. It ranks among the 200 best cryptocurrencies in terms of market cap.

Conclusion

Ribbon Finance is a promising platform that offers a range of investment strategies to generate yield on crypto assets. The platform has introduced several innovative features over the years to provide better results to investors. Investors can take advantage of Theta Vaults, Earn Vaults, and Treasury Vaults to generate high yields.

If you need more information about how Ribbon Finance Works, feel free to get in touch with us. We also invite you to subscribe to our weekly newsletter if you need regular updates about Bitcoin and the crypto market.