Decentralized Finance (DeFi) was a prominent segment of the cryptocurrency market in 2021 and is poised to continue facilitating mass adoption of cryptocurrencies in 2022. This comes as institutional and individual investors are embracing the emergence of Finance 2.0.
A DeFi project that got the year off to a bullish start is Ribbon Finance (RBN), a protocol that uses financial engineering to create structured products such as automated options strategies. Designed to provide users with sustainable returns over time.
Data from Cointelegraph Markets Pro and TradingView shows that since trading as low as $1.83 on Dec. 30, the RBA has surged 146% to a daily high of $4.50 on Jan. 3, with 24-hour trading volume up hour to $60.6. Million.
Three reasons behind the RBN building momentum include the launch of Ribbon Finance V2, adding new blockchain networks to the Ribbon Finance ecosystem and increasing the total value secured on the Ribbon Finance protocol.
The tape is played V2
One of the biggest developments that helped drive RBN’s price growth was the release of the Ribbon V2. Originally announced in August 2021, the project has been slowly rolling over liquidity and building its pools while also testing new features.
Reminder to roll over your positions by Friday from V1 to V2 to be eligible for this week’s payout!
You will be charged an exit fee if you withdraw your money from V1, but the migration from V1 -> V2 is free of charge (other than the gas fee)
– Ribbon Finance (ribbonfinance) January 3, 2022
The upgrades that came with V2 focused on decentralizing ribbon vaults. This includes the ability to allow smart contracts to set execution prices for options that the treasury sells. Additionally, creating an on-chain auction mechanism allows anyone to participate on the other side of the vaults rather than just whitelisted market makers.
Ribbon V2 also includes an upgrade to the protocol’s vault accounting system. This includes creating controllable vault parameters that allow RBN owners to have a say in deciding which strategy each store deploys, as well as the management and performance fees that each store requires.
These new upgrades should make Ribbon Finance more owned by the community and also help increase the long-term returns offered.
Tape adds support for avalanche
The second reason for the RBA’s increased momentum is the recent addition of support for the Avalanche Network (AVAX). It includes a new AVAX covered call vault where users can deposit AVAX and earn 24.18% return at the time of writing.
According to the protocol, the addition of avalanche support “represents Ribbon’s first step into a multi-chain future,” indicating that the project has plans to continue adding support to other networks as time progresses.
At the time of writing, there are 144,320 AVAX locked onto the Ribbon Finance protocol with a value of approximately $15.3 million.
Related: What awaits us in the world of crypto and blockchain in 2022? Expert Answers, Part 3
Total locked value reaches a new high
A third sign of the growing strength of Ribbon Finance is the total value locked on the protocol, which reached a new record high of $295.96 million on January 3, according to data from Devi Lama.
The most recent significant support for TVL coincided with the addition of avalanche support on December 15, 2021, and foreshadows the possibility of merging support for other networks. This could lead to more increases in the future.
Aside from AVAX’s covered call treasury, Ribbon Finance currently offers six different automated products on the Ethereum (ETH) network including Aave (AAVE) ETH stETH secured covered call strategy, yvUSDC ETH covered call strategy, and ETH covered call strategy, WBTC covered call strategy and ETH sell/sell strategy.
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