Monthly Bonzo Finance AMA - September

The Spaces is a monthly Bonzo Finance AMA moderated by Renee with CEO Brady and CTO Goran. They confirmed 8 million Bonzo governance tokens were distributed for Season 3 points, clarified that rewards depend on leaderboard rank and relative points, and set Season 4 to end on December 8, with future seasons undecided. They defended the points program as less market-distorting than direct liquidity incentives. On vaults, Halborn’s audit is complete (critical and medium issues fixed); UI/API work continues with a launch target around October, and a marketing announcement planned. For security, Halborn remains primary while Trail of Bits has been engaged for a secondary audit of the lending protocol. Technically, Bonzo is adding dual support for HTS and ERC‑20 assets, to be covered in the Trail of Bits audit, and expects LayerZero assets like wrapped ETH/WBTC soon, alongside an in-app bridge. Asset supply caps and listings (including GIB and xBONZO) remain on hold pending analysis by independent risk steward RE7 via change memos. MetaMask support is coming to serve institutional demand. On CEX listings, only Tier 1/2 venues are likely worthwhile; no promises were made.

Bonzo Finance Monthly AMA — Comprehensive Summary

Participants

• Renee — Moderator
• Brady — CEO, Bonzo Finance Labs
• Goran — CTO, Bonzo Finance Labs

Opening and Context

• Standard disclaimer: Views shared are personal and not official Bonzo Finance advice; forward-looking statements carry risks; do your own research; neither Bonzo Finance nor speakers are liable for actions taken based on the information shared.
• Session coincides with points claim day; significant community interest in points, audits, asset support, and listings.

Points Program (Seasons, Rewards, Mechanics)

• Season 3 rewards allocation (Brady): 8 million BONZO governance tokens were distributed across all eligible participants for Season 3.
• Why some users received fewer tokens in Season 3 than Season 2 despite similar activity (Brady):
  • Distribution is primarily driven by (1) leaderboard rank and (2) relative position/points versus the broader participant set.
  • Absolute points or supplied amounts matter less than their standing relative to others in that season.
  • Example concept: Rank # 50 can correspond to very different points and allocations season-to-season depending on overall participation and distribution curve.
• Season 4 timing (Brady):
  • Season 4 has started and runs for ~3 months, ending December 8.
• On future seasons (Brady with light humor):
  • No concrete plans for Season 5+ yet; the team will evaluate closer to the end of Season 4 and weigh community feedback.
  • Rationale for continuing seasons: points have proven effective at broad governance token distribution to active users while minimizing direct market distortions compared to pool-specific liquidity incentives.
  • Contrast with direct incentives: Token incentives on lending/borrowing can encourage looping/leveraged behavior that clogs markets and harms usability for genuine lenders/borrowers. Points avoid those side effects while still rewarding participation.

Audits and Security

• Vaults audit with Halborn (Goran):
  • Status: Completed. The audit surfaced a couple of critical issues and one medium issue, all of which were fixed.
  • Next steps: UI, backend systems, and API work are underway (Season 4 launch activities temporarily took priority; vaults work resumes immediately).
  • Launch timing: Team is targeting early October for vaults. A joint marketing update with Halborn is likely next week.
• Secondary audit of lending protocol (Brady):
  • Halborn has historically audited the core codebase and subsequent changes; reports are available in documentation.
  • For additional assurance, Trail of Bits has been engaged to conduct a secondary audit of the lending protocol.
  • Objective: Maximize protocol and user safety. No audit guarantees 100% safety, but this raises the bar.

Asset Support: ERC-20 and Bridging

• Dual asset standard support (Brady, Goran):
  • The ecosystem is moving toward supporting EVM ERC-20 assets alongside Hedera Token Service (HTS) tokens.
  • Integrations (e.g., LayerZero, Axelar) and sources like Swarm (tokenized equities) frequently rely on ERC-20 standards; bridged assets may arrive as modified ERC-20s.
  • Technical status: ERC-20 support is integrated at the protocol level and appears to work for lending/borrowing across both HTS and ERC-20 in the same application context.
  • Governance and safety: Any codebase changes require audits. ERC-20 support will be included in the Trail of Bits secondary audit (and Halborn, as needed) before production deployment.
• Incoming bridged assets (Brady):
  • Community has seen SaucerSwap DAO proposals for LayerZero-based wrapped ETH and wrapped BTC. While no firm dates were provided, credible signals suggest potential availability within roughly a month.

Lending and Borrowing: Market Parameters and Risk Management

• Supply caps and limitations on long-tail assets (e.g., DOVU) (Brady):
  • Current constraints are anchored to secondary liquidity conditions, primarily on SaucerSwap, and how concentrated/maintained liquidity ranges are (particularly in V2-style pools).
  • Limited external liquidity translates into conservative risk parameters (caps, LTVs, etc.) in Bonzo Finance to protect market integrity.
  • The team acknowledges user frustration; these constraints also slow protocol growth and revenue, but safety is prioritized during this maturation phase.
• Independent risk steward process (Brady):
  • Re7 serves as the independent risk steward, conducting holistic analyses of asset markets, cross-ecosystem liquidity, and other parameters.
  • They formalize recommended changes via “change memos” (DAO-proposal-like documents with data-backed justifications). All change memos are published in the docs.
  • Timeline: Re7 is running deeper analyses; minimum lead time is ~3 weeks. Current parameters are set to a baseline pending their results. After change memos, there may be additional time before changes are enacted.
  • Educational resource: Brady’s recent walkthrough with Crypto School (Crypto for the Rest of Us/Brian) explains risk parameters and on-dashboard mechanics; recommended for deeper understanding.

New Asset Listings and Protocol Tokens

• GIB listing (Brady):
  • There is strong community interest, but new asset listings are on hold pending the risk steward’s analysis and recommendations. Aim is to ensure any additions can be supported safely and sustainably.
• xBONZO listing for lending/borrowing (Brady):
  • Treated the same as any third-party asset. No special treatment for Bonzo’s own tokenized assets.
  • Inclusion depends on the risk governance flow and findings from Re7.

Product Roadmap and UX Enhancements

• Vaults (Brady, Goran):
  • Primary focus due to expected impact on user adoption and protocol revenue; after audit fixes, attention is on UI/backend/API, targeting early October launch.
• Bridges and in-app accessibility (Brady):
  • Active support for LayerZero bridging across the ecosystem; Bonzo aims to offer a native bridging experience in its dashboard as LayerZero contracts for assets go live.
• Wallet support (Brady):
  • MetaMask support is rolling out soon. While most current users rely on HashPack/Kabila, institutional users often require MetaMask. Enabling MetaMask is expected to increase institutional participation, a key driver in lending markets.
• “Dust” balances issue (Goran):
  • Small residual token fragment (dust) balances persist for some users. A previous fix attempt failed due to technical constraints around decimals and token retrieval.
  • The issue remains on the team’s task list; will be addressed after higher-priority deliveries (e.g., vaults).

Exchange Listings for BONZO

• Centralized exchanges (Brady):
  • No concrete promises at this time. The ROI of Tier 3/4 listings is often poor given costs (including market making) and risks (low-volume price discrepancies across venues).
  • If ROI justifies it, Tier 1 or strong Tier 2 listings could be considered by the Bonzo Finance Foundation. Any listing would be weighed carefully for costs/benefits and overall impact.

Key Takeaways

• Season 4 is live and ends December 8; Season 3 distributed 8 million BONZO to participants.
• Vaults: Halborn audit completed; issues fixed; targeting early October launch after UI/backend/API work. A Halborn co-announcement is likely.
• Security: Trail of Bits engaged for a secondary audit of the lending protocol; Halborn continues as an auditor for code changes.
• ERC-20: Dual support (HTS + ERC-20) is implemented and will be audit-validated; LayerZero-based assets (e.g., wETH, wBTC) are anticipated, with cautious, non-committal timing.
• Market risk controls: Caps on certain assets stem from limited external liquidity and concentration; Re7 is conducting deeper analysis (≥3 weeks) and will publish change memos; listings and parameter changes will follow their guidance.
• Roadmap focus: Vaults, bridging integrations with an in-app experience, and MetaMask support for institutions; dust fix queued post-vaults.
• Listings: CEX listings considered only if high-tier and ROI-positive; no commitments.

Closing

• The team appreciates community engagement and feedback; expect further updates as audits conclude, vaults reach production, LayerZero assets become available, and Re7 publishes change memos guiding safe parameter tuning and new listings.