General Characteristics

Bonzo Finance is an open-source, non-custodial lending and borrowing protocol built on the Hedera network. It facilitates decentralized finance (DeFi) services, supporting assets such as $HBAR, native $USDC, Hedera ecosystem tokens, and wrapped (bridged) cryptocurrencies.

Bonzo leverages open-source smart contracts adapted from Aave v2 to Hedera’s native token services, ensuring secure, censorship-resistant, and permissionless transactions. It leverages Supra and Chainlink oracles for accurate price feeds, providing transparent and efficient operations.

The Bonzo ecosystem consists of four main components: Bonzo Finance Labs, a Dubai-based development team responsible for the protocol’s development; Bonzo Finance Protocol, a liquidity pool-based lending system supporting over-collateralized loans, flash loans and dynamic interest rate models; Bonzo Interface, a web-hosted platform for user interaction; and Bonzo DAO (Coming Soon), a decentralized governance model where token holders participate in the protocol’s future key decisions.

Roadmap

In Development:

• Single-sided staking for $XBONZO.  

Planned for Development: 

• Discord faucet for $BONZO tokens.  

Prioritized for Development:

• Cross-chain bridging integration with Axelar and LayerZero.  

Completed:

• Smart contract audits.  
• Integration of Supra oracles for accurate price feeds.  
• Launch of the Bonzo NFT collectibles.  
• Deployment of DeFi analytics tools, including integration with CoinGecko and DeFi Llama.  
• Implementation of WalletConnect and HashConnect.  

Functionality and Utility

Bonzo Finance enables users to lend and borrow crypto assets without intermediaries. Key features include:

• Lending and Borrowing: Users supply assets to earn interest or borrow against their holdings.  
• Flash Loans: Uncollateralized loans repaid within a single transaction block.  
• Bonzo Points System: Users earn points for activity, contributing to future $BONZO token rewards.  
• NFT-Based Multipliers: Holding Bonzo NFTs increases point earnings through a tiered multiplier system.

Market Performance and Dynamics

When writing this line, $BONZO traded at $0.03219, down 4% in the past 24 hours and up 38% over the past week. It has a liquidity of $864K, a market cap of $1.6M, and a 24-hour trading volume of $38K.

$BONZO has a total supply of 400M and a circulating supply of 50M.

Community

Bonzo has a rapidly growing community supported by active engagement on social media platforms like X and Discord.

Pros

• Utility-driven
• Leverages Hedera’s speed and affordability
• NFT integration
• Transparent roadmap

7 Questions to Bonzo Finance Team

1) What inspired you to build Bonzo Finance on Hedera instead of more widely adopted networks like Ethereum or Solana?

Prior to starting Bonzo Finance Labs in March of 2024, I actually worked at Hedera for five and a half years and became incredibly familiar with the technology, community members, and ecosystem. I’ve always wanted to start my own business, and worked at some great startups throughout my career, including the open source distributed systems company DataStax and the security company Cloudflare, to learn as much as possible before taking the leap.

In early 2024, it started to become clear that Hedera’s native web3 ecosystem(s) were on a strong trajectory, both from an economic and technical perspective (particularly in DeFi), and the market timing felt perfect to introduce decentralized lending to the ecosystem.

From an economic perspective, a solid foundation was laid with native ecosystem wallet providers, including HashPack, Kabila, and MetaMask (Hedera’s MetaMask snap); stablecoin liquidity, with Hedera native $USDC, on the rise; liquid staking protocols, such as Stader Labs’ $HBARX having hundreds of millions of dollars in TVL; and Hedera’s leading DEX SaucerSwap, built on Uniswap v3 with ICHI auto-pools, was driving massive growth, adoption, and liquidity for the Hedera network. On-chain trading volume continued to grow, with retail user adoption accelerating.

Being able to get in early on a network / ecosystem and capitalize on that growth is a big opportunity that most teams don’t often get — it’s great because there’s less noise to fight in getting your message out and nothing beats being able to with an ecosystem as it evolves and matures; the feels like Solana in its infancy, post-FTX, with some really smart and passionate devs guiding the ecosystem towards success.

From a technical perspective, Hedera core engineering contributors made incredible strides on the EVM equivalence front, ensuring developer tools, libraries, and testing environments, such as HardHat, Foundry, and more, works for builders on Hedera. In addition, oracles had just come online, with Supra and Pyth, and now Chainlink, who we jointly announced an integration with last week during ETHDenver.

DeFi ecosystems follow a natural evolutionary path that typically begins with liquid staking protocols, DEXs, and the establishment of robust liquidity and trading volume. This sets the stage for decentralized lending, acting as a “liquidity layer” for its next phase; some sophisticated DeFi protocols, such as Index Coop and others, rely on decentralized lending to function. At Bonzo Finance, our core mission is to become “The Liquidity Layer of Hedera”, providing the essential lending infrastructure that will support and accelerate the growth of users, liquidity, and advanced DeFi protocols on the network.

2) The project is built on Aave v2’s open-source code but adapted for Hedera. What were the biggest challenges in making this adaptation work?

Most of the work performed in porting the Aave v2 codebase to Hedera was adapting it to work with Hedera's unique architecture, particularly its native Token Service (HTS), EVM, and the way accounts are handled.

The HTS is incredibly fast, efficient, and cost-effective, with all tokens (both fungible and non-fungible) being interpreted as EVM ERC-20 and ERC-721 assets on the network and composable with the EVM. Since the entire Hedera ecosystem has adopted the HTS standard, including tokens like $HBARX, $KARATE, and Hedera native $USDC, we had to adapt Aave v2's liquidity pools to support these assets.

We also needed to implement support for Hedera's "Token Associate" functionality – this is actually one of my favorite aspects of the Hedera network as a retail user; “token associate” protects user accounts from spam transactions and assets by requiring users to "associate" tokens to their accounts before receiving them. We run a check prior to transactions to determine if the token being borrowed is associated (sort of like an “allowance check”), and if it isn’t, we bundle that transaction for the user to approve.

You may be asking “how do projects perform airdrops if the tokens need to be associated?” Well, the Hedera network’s approach to airdrops via HIP-904: Frictionless Airdrops uses a token inbox system allows users to accept or decline tokens easily; as a frequent retail user of Solana, Arbitrum, and Base, I can say first-hand it’s a way better experience that doesn’t make me want to rip my hair out trying to comb through a sea of spam transactions on the explorer.

Somewhat interestingly, we kept Aave’s liquidity pool tokens (modified ERC-20 assets) as EVM assets — this is because they’re “rebasing” tokens that call for unique functionality / programmability and that worked right out of the box on Hedera.

3) Hedera offers unique benefits like high throughput and fair transaction ordering. How do these advantages translate into a superior lending and borrowing experience for users?

Hedera's high throughput ensures end users of Bonzo Finance experience near-instant transaction confirmations when supplying assets, borrowing, or managing their positions — in addition, for liquidation bots, speed is crucial for performing fast and efficient liquidations to keep creditors and markets healthy.

Hedera's fair transaction ordering eliminates MEV (Maximal Extractable Value) attacks commonly seen on other networks; on other EVM-based lending protocols, user transactions and liquidations can be front-run or sandwiched, resulting in worse execution prices or even failed liquidations. Hedera's consensus timestamp creates a guaranteed fair ordering system, ensuring all users get equal treatment regardless of their transaction fees (they can’t bribe nodes to prioritize their transaction), which is especially important during liquidation events when milliseconds matter.

Combining the previous two examples with Hedera's low, fixed fee structure, based in USD but paid in HBAR, makes frequent interactions with the protocol economically viable. Every transaction type, from supplying assets to performing even the most advanced liquidation processes that utilize flash loans, costs exactly the same price in USD terms every time, regardless of $HBAR token price and network usage volatility. Users can make smaller deposits or adjustments to their positions without worrying about prohibitive gas costs eating into their profits, and liquidation bots can quickly liquidate even the smallest of positions with economic viability, preventing the accumulation of “bad debt” —  for reference, Aave has nearly $400k of bad debt accumulated.

The combination of these inherent features of Hedera opens up lending and borrowing to an even wider long-tail audience, enables more granular position management, and creates better rates and lower risk premiums — ultimately, it enables Hedera’s DeFi ecosystem to be more capital-efficient than what's possible on many alternative networks.

4) The Bonzo DAO is set to launch in 2025. What steps are being taken now to ensure a smooth transition to community governance?

The Bonzo Finance DAO, scheduled for launch in 2025, is being prepared through a careful transition from centralized operations to full community governance. Currently, Bonzo Finance Labs is operating under DAO principles while establishing formal processes for community proposals and voting mechanisms. The team is actively engaging the community through discord, with “mock proposals” that help educate all governance tokens holders on parameter changes and proposals that require extensive and deep knowledge of the protocol. In addition, the Bonzo Finance Labs team is developing the necessary Hedera-based smart contract infrastructure, and creating user-friendly voting interfaces to ensure readiness.

The transition will be facilitated by the Bonzo Finance Foundation, which will oversee regulatory compliance and treasury management while empowering $BONZO governance token holders with decision-making authority. This gradual shift toward decentralization includes substantial investment in governance frameworks and community education initiatives, prioritizing transparency, accountability, and community ownership in advance of the full DAO implementation.

5) Since $BONZO token emissions and fee distributions are subject to governance votes, how do you balance decentralization with ensuring the long-term sustainability of the protocol?

Bonzo Finance hopes to strike a balance between decentralization and long-term sustainability by implementing structured governance frameworks that decentralize decision-making authority, while at the same time maintaining DAO safety and security through a wide-spread distribution of tokens over a period of 5 years.
The governance system for $BONZO token emissions and fee distributions is designed with sustainability-focused parameters and education that focus on community voting, ensuring decisions support long-term protocol viability while still giving token holders meaningful input.
The protocol further reinforces this balance through the Bonzo Finance Foundation, which serves as a stabilizing entity overseeing treasury management and providing expertise on sustainable tokenomics. This hybrid approach allows for decentralized governance that incorporates both community wisdom and economic safeguards, creating an ecosystem where token holders can influence protocol direction while operating within boundaries that protect Bonzo's longevity and financial stability.

6) What role do NFTs, such as the 1st Edition Bonzo NFT Collectibles and Cybernetic NFT, play in the Bonzo ecosystem? Are there any future NFT integrations planned?

Bonzo NFT Collectibles were hand drawn and digitized by emmy-award winning artist JD Gargano (@InAMaze) (highly recommend checking out his work) — the NFTs offer community-centric utility and play several significant roles in the Bonzo ecosystem, including a widespread distribution of $BONZO governance tokens to a strong and passionate community, protocol points multiplier(s), community roles in Discord, and access to the $BONZO faucet in Discord (coming soon).

Protocol Points Multipliers

Bonzo NFT holders receive a points multiplier in the Bonzo Points program — which rewards active community members who supply and borrow liquidity from the protocol. Point earnings are based on the dollar value of assets supplied and borrowed, and distributed on a 24 hour basis. Point earnings are used to inform claimable $BONZO at the end of every points season, each lasting 3 months, with 3 seasons in total; we just started Season 2 on March 1st.

The points multipliers are as follows:

• Desert Bonzo: 1.1x multiplier
• Ocean Bonzo: 1.2x multiplier
• Space Bonzo: 1.3x multiplier
• Singularity Bonzo: 1.5x multiplier
• Cybernetic Bonzo: 0.05x multiplier that’s stackable with any NFT up to 2x

The Bonzo Finance Foundation isn’t planning on performing any more NFT drops beyond the ones listed above, but these NFTs can be purchased on secondary markets, such as Sentx. If you do decide to purchase an NFT, it’s important to use the NFT Checker to determine whether governance tokens have been claimed for the NFT purchased.

7) Where do you see Bonzo Finance in five years? What milestones do you aim to achieve along the way?

Bonzo Finance’s mission is to become “The Liquidity Layer of Hedera” — in five years time, we hope that our contributions to the development of Bonzo Finance results in widespread adoption and liquidity, fully autonomous operation in the hands of its governance token holders, and a robust suite of functionalities that deliver immense value to the Hedera economy.

The most important, top-line milestone for the Bonzo Finance protocol is economic sustainability through fee revenue generation — in order to achieve this, the protocol must 1) expand its offerings with differentiated featuresets that drive user adoption 2) attract an abundance of liquidity and utilization (borrowing), with stablecoin assets being the most critical and 3) support growing the total addressable market (retail and institutional users) across the Hedera economy

Official links

Token ID: 0.0.8279134

EVM Address: 0x00000000000000000000000000000000007e545e

Whitepaper

Website

Twitter

Discord 

YouTube

Where to Buy

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