DeFi Bond Issuer Porter Attempts Rebrand — Without its Founder

Blockworks exclusive: Three of the four Porter Finance team members are re-launching the DeFi protocol as Arbor Finance

article-image

share

key takeaways

  • Arbor, formerly Porter, will let DAOs issue bonds for interest rates as high as 20%
  • Porter Finance’s original founder closed the platform in July, shortly after its launch

In July, Porter Finance shut down its DeFi bond issuance protocol after just four weeks, citing a lack of demand. Four months later, three of Porter’s initial four developers are giving things another go under “Arbor.”

Porter Finance is rebranding to Arbor Finance today, forking its code while keeping the same core function — allowing DAOs to raise debt in stablecoins while using their native tokens as collateral.

Arbor’s pitch is that DAOs seeking to hold their native tokens through the bear market will issue debt with the hope that the tokens will appreciate in value during the next bull run.

Deployed to the Ethereum blockchain, Arbor works by creating ERC-20 bond tokens that lenders can bid on. Lending yield will be higher than in the traditional finance world to account for the additional risk of often-volatile governance tokens — interest rates could be set as high as 20%, Arbor told Blockworks.

Arbor believes purchasing DAO bonds is better for investors than participating in a token sale or initial coin offering.

“The question isn’t, ‘is the token going to go up or down?’ The question is, ‘is the DAO going to be able to repay the principal plus interest at maturity?,’” Arbor co-founder Russell Bookland said.

Arbor also offers convertible bonds, meaning lenders can convert their bonds into DAO tokens before their bond matures.

DeFi devs bet Porter shutdown was premature

Shortly after launching in June, Porter Finance partnered with the DeFi lending platform Ribbon Finance and received $4.2 million in bids for its bonds. Given its initial success, Porter’s shutdown just a few weeks later was head-scratching.

Arbor told Blockworks the decision came from Porter founder Jordan Meyer over objections from the rest of the team, who are now launching Arbor. The group declined to elaborate further, and Meyer did not return a request for comment.

In Meyer’s blog post announcing Porter’s shutdown, the founder said he was “not confident there will be large inflows of lending demand.” The Arbor team said it does not expect institutional investors to be a large initial source of capital.

Still, Arbor is betting on its protocol, even in a slumping crypto market.

“We saw quite a significant uptick in inbound demand as the market crashed because now DAOs were really feeling the pain point of not having very diversified treasuries,” Bookland said. “They didn’t have a robust stablecoin supply.”

And DAOs have been looking to make use of their treasuries in crypto winter. Last week, MakerDAO approved a proposal to move $1.6 million of its USDC into Coinbase Prime. This summer, Uniswap launched a foundation to grow its ecosystem using treasury funds.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million