BNPL Pay has finalized its investment round. The Fintech company has secured a total of $7.14 million for the ongoing development of its protocol. As previously reported, the BNPL token is the utility and governance token of the BNPL Pay ecosystem.
Below is a breakdown of the funding stages (shared by the BNPL Pay team):
- Private Rounds
- Raise: $5.85 million
- Price: $0.04
- Vesting:12 Months
- Public (DEX)
- ThorStarter (Oversubscribed 8x)
- Raise: $200,000
- Price $0.04
- Vesting: None
- Balancer LBP:
- Raise: $1.09M
- Final Price: $0.081
- Vesting: None
As stated in the announcement:
“The foundation and the team look forward to updating you as we progress with our roadmap, which can be found on the BNPL Pay website here. There are big things coming to the future of DeFi and we look forward to leading the way together as a community.”
The blog post from BNPL Pay further noted that updates will be made available through their official communication channels.
As covered, BNPL Pay is a decentralized lending protocol that “puts credit in the hands of those who need it the most, namely, those who cannot meet the requirements to take on collateralized loans.” The Fintech firm has implemented the BNPL Pay Protocol, which is described as an uncollateralized lending platform that services such requirements.
As explained by BNPL Pay:
“We tackle the counterparty risk associated with uncollateralized borrowing through a distributed network of Banking Nodes. Our system delegates the tasks of credit checks, risk assessment and other due diligence requirements to pool operators, and creates a set of incentive structures that reward and punish these operators for performing such tasks effectively.”
The developers also noted that banking nodes manage pools of liquidity, and have “the autonomy to delegate these funds to potential borrowers in the parameters they see fit, while lenders can choose an operator that suits their risk-reward preferences to conduct interest bearing activities based on fully transparent data.”
Borrowers are able to apply for credit from any or all Bank Nodes, “and if approved, are issued loans on fully customizable and agreed upon terms.” Unlike other protocols within decentralized finance (DeFi), uncollateralized borrowing “presents an entirely new avenue of risk that is yet to be tackled within blockchain networks, namely, counterparty risk.”
BNPL Pay aims to address this risk by “delegating the tasks of credit checks, risk assessment and other processes conducted by traditional credit facilities to our node operators.” With this, node operators sit “at the heart of our protocol, and connect lenders with borrowers.”
The incentive structure has been designed or built directly into their protocol and BNPL tokens are used to reward or incentivize node operators who carry out their duties properly, while taking necessary actions against operators that “fail to carry out their duties.” This is done through “a fair revenue share and a penalizing slashing model,” the announcement explained.
As noted in the update, a percentage of the revenue obtained from interest payments will be given to node operators. The BNPL protocol will “start with a 10% revenue share, but be subject to change based on the voting activity from BNPL stakers. (see Governance section).”
The interest accrued is “only claimable upon maturity of a loan contract, regardless of the repayment schedule,” the update clarified. Additionally, Banking Node operators will “share in a further 10% interest distributed to stakers in the pool, paid in the additional BNPL tokens.”
For more details on this update, check here.