Bacon Protocol launches decentralized mortgage platform

The decentralized mortgage lender Bacon Protocol was officially launched on Tuesday, allowing cryptocurrency investors to participate in ...



The decentralized mortgage lender Bacon Protocol was officially launched on Tuesday, allowing cryptocurrency investors to participate in the housing market through a new stablecoin backed by USD Coin (USDC) and home loans.

In addition to launching his protocol, Bacon announced on Tuesday that he is holding a public sale of bHome tokens, which is described as a stable + dollar-for-dollar backed coin by the USDC, liens and loans on properties to the USDC. United States. Early participants in the sale will be eligible to receive additional rewards via the BACON governance token.

The Bacon Protocol works by giving owners the ability to exchange a lien on their property for a non-fungible token, or NFT, which is a percentage of the property they have purchased. The NFT gives buyers a guarantee to access other crypto markets, including decentralized finance (DeFi). The whole process will initially be facilitated by LoanSnap, backed by Virgin, a financial services company that helps US buyers save on interest rates and other associated costs.

The US mortgage market is a complex ecosystem comprising of banks, businesses, governments and borrowers. In 2019, the value of all residential mortgage loans in the United States was estimated at $ 11 trillion.

Despite record interest rates, the market is attracting large investors eager to earn interest on mortgages and liens. It is estimated that banks, businesses and governments purchase more than $ 2 trillion in mortgages each year. Meanwhile, the Federal Reserve has more As of Thursday, $ 2.5 trillion in mortgage-backed securities was on its balance sheet.

Related: New Blockchain Lab Aims to Modernize the Mortgage Industry

While some mortgage providers have expressed interest in accepting cryptocurrency payments, the industry has so far largely moved beyond DeFi’s sphere of influence. That may soon change as new innovations continue to bridge the divide between these two worlds.

Bacon Protocol supporters, including Alex Pall of venture capital fund The Chainsmokers, believe blockchain technology can bring mortgage investments to the general public. Currently, the big banks earn billions of dollars in annual interest on their mortgage holdings.