In an effort to better streamline communication with our community and provide more up-to-date progress reports, we will start publishing community updates. These updates will also lay out some thoughts around the future of the project, setting short-term and long-term strategy goals, and addressing any setbacks we are experiencing.

Over the past month our team has been working hard on:

• finalizing our smart contracts audits (Bonq Audit Report)

• fine tuning the UI experience,

• de-risking our protocol

• getting ready for launch.

With so many changes and uncertainty in crypto markets, we've taken a sophisticated approach to our execution by building a data driven risk model that allows a wide variety of assets to be listed in a safe and transparent way. Risk management and security has always been our top priority.

Bonq protocol will first deploy on Polygon

The vision for Bonq is multi-chain, with the first chain being Polygon. The decision to launch on Polygon has been influenced primarily by Polygon’s focus on enterprises and real world assets, impressive scaling possibilities, low transaction fees, high liquidity to the DeFi ecosystem and native support for a lot of project tokens  which could translate into a large number of potential users for our platform.

Additional benefits of deploying on the Polygon chain:

• Further integration with Ethereum as PoS to L2 upgrade is underway

• Native support for ERC20 tokens

• More than 1b TVL in DeFi and growing

• Uniswap v3 for efficient swaps between stable coins. This is critical in providing concentrated liquidity at launch

• Arrakis Finance vaults that provide ERC20 wrapper over Uniswap v3 positions are also deployed on Polygon. Arrakis makes LP experience as easy as on Uniswap v2.

BonqDAO ultimately aims to become a cross chain DeFi liquidity protocol that will include other chains in 2023. A full multi-chain roadmap will be announced early next year.

Initially, we planned on launching Bonq on the Energy Web Chain first. We fully understand the impact a pivot to Polygon has on the community and we also recognize that some community members may be concerned or even disagree with our choice. We wish them to understand the numerous advantages for our users by making this adjustment. The decision to make this change was not taken lightly and was carefully and strategically analyzed to ensure long-term success for our protocol. All of our decisions are made to ensure the best adoption and deepest liquidity for our supported tokens which will result in a stable and robust platform.

Whitelisted tokens

At launch, BonqDAO will whitelist a small number of tokens to ensure enough liquidity across different pools and monitor the performance and behavior of our protocol.

Users can borrow up to the Minimum Borrowing Collateral Ratio (for example 1 BEUR for every 1.3 EUR worth of ETH). Their troves will be liquidated if the collateral ratio falls below the Minimum Liquidation Collateral Ratio

BonqDAO relies on a data-driven risk model that assesses a protocol’s creditworthiness, decides if a token can get whitelisted as a collateral, and sets the Minimum Collateral Ratios and Borrowing Capacity per token. Borrowing Capacity is not currently implemented, but our aim is to have a fully functional risk model by Q1 2023 when the new round of audits would take place. When the new features would be in place, I would expect the MCRs of ALBT to decrease making it more capital efficient for the community.

Liquidity pools

Liquidity is the name of the game when it comes to DeFi and after researching current market solutions we decided that Uniswap V3 with its concentrated liquidity feature is the best option for us. We are going to use Arrakis Finance - a protocol that specializes in concentrated and active liquidity management - to create ERC20 wrapper over different Uniswap V3 positions and rebalance within the pool if necessary. Arrakis Finance has been audited and trusted by users who deposited over 800 million worth of assets.

The initial Arrakis Finance liquidity pools are going to be:

• USDC/ BEUR

• Wrapped ETH/ BEUR

• MATIC/ BEUR

• ALBT/ BEUR

BNQ Utility Token

For security and ease of listing on exchanges, BNQ will be an ERC20 token on Ethereum.

At launch, there are only 2 ways for the community to earn BNQ tokens.

1. Participate in the Bonq campaign on the Fundrs platform

2. Stake BEUR tokens into the Bonq’s Stability Pool

• Buy BEUR from the liquidity pools or mint BEUR by depositing collateral into the trove

• Stake BEUR in the Stability Pool inside the Bonq application

• Earn daily rewards as Stability Pool will distribute 50k BNQ daily to all staker pro-ratio. In addition to daily BNQ rewards, staking BEUR would receive collateral from liquidated troves.

• There is no lock-up period on staking BEUR or BNQ rewards. They can be withdrawn or harvest any time

After the Fundrs campaign ends, we will open a BNQ/ BEUR liquidity pool on Uniswap V3

Bonq Fundrs Campaign - estimated date Early - Mid December (to be decided by the AllianceBlock team)

Fundrs with rALBT tokens will be able to earn BNQ tokens by providing liquidity to BEUR liquidity pools. In total, Bonq will distribute 3,000,000 (3 million) BNQ tokens during the 14 days of the campaign.

Step by step process of claiming the BNQ rewards:

• Earn rALBT by staking ALBT

• Buy BEUR from the liquidity pools or mint BEUR by depositing collateral into the trove

• Provide liquidity to one of the Arrakis Finance liquidity pools which will automatically stake on Uniswap V3

• LP ERC20 token can be deposited in AllianceBlock DeFi terminal and earn rewards pro-rata

• There is no lock up on LP tokens or BNQ rewards. They can be withdrawn or harvested any time

Launch BonqDAO protocol by the end of November 2022

Once the UI testing is complete and we’ll have made any necessary changes, the protocol will be ready for deployment in production on Polygon. Before the launch of the Bonq campaign on Fundrs, we well:

• Deploy the protocol on Polygon

• Launch liquidity pools on Uniswap V3 on Polygon

• Launch Arrakins Finance vaults

• Mint BNQ utility token

This was quite a long update, however, we feel we owe it to our community to be as transparent as possible as we work hard to deliver on our mission to make self-sovereign a reality.