Porter Finance Team Returns for Second Shot at DeFi Bonds Project

Months after Porter Finance was shuttered due to lack of demand, three of the four team members say they still feel the potential for on-chain bond issuances is massive.

AccessTimeIconNov 1, 2022 at 9:34 a.m. UTC
Updated May 9, 2023 at 4:01 a.m. UTC

Three of the four people behind now-defunct decentralized finance (DeFi) bonds tool Porter Finance relaunched the project on Monday, months after Porter was shut due to a lack of demand from borrowers.

Rebranded as Arbor Finance, the protocol is designed to allow decentralized autonomous organizations (DAO) raise money by borrowing against their native tokens with no liquidations and at fixed interest rates through tokenized DeFi bonds.

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  • Selling bonds to raise money is an attractive alternative to selling tokens and gives DAOs another way of funding growth, the developers said in an email to CoinDesk. The bond buyers receive high fixed yields in exchange for lending to these DAOs.

    “We expect lenders to earn 10%-20% APY on bonds issued through Arbor,” co-founder Russell Bookland said in an email.

    Bonds allow DAOs to borrow funds at fixed interest rates without the fear of liquidation by using their native tokens, which make up the majority of their treasuries. Borrowers using collateralized debt positions on other protocols must maintain a particular collateral ratio or risk being liquidated.

    Porter Finance shut in July after founder Jordan Meyer cited a lack of demand amid a market-wide price decline and overall waning sentiment about the long-term growth of cryptocurrencies. At the time, Porter said it was “not confident” there would be large inflows of lending demand for the fixed-income DeFi products it offered. This was primarily due to the competitiveness of rates offered in traditional finance and the lack of institutional fixed-income DeFi adoption over the previous year.

    Other core team members say there’s still a market for its product, especially as market sentiment improves.

    “Three out of the four team members at Porter still feel that the potential for on-chain bond issuances is a massive market,” Bookland said. “The potential for high APY for lenders and non-dilutive funding for DAOs is far too big of an opportunity to ignore. We, therefore, decided to build Arbor Finance with a fork of Porter's code.”

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    Shaurya Malwa

    Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.