What is Bird.Money?
Bird is a DeFi platform. When you see ‘decentralized finance (DeFi) platform’, think about a place that connects lenders and borrowers. DeFi aims to use blockchain technology and smart contracts to do what banks do, but at fractions of the infrastructure cost. Traditional banks lend out money at high interest rates and pay very low interest rates on savings accounts. This is called the “spread” business. How do you think those bankers afford such nice suits and buildings? DeFi leaves the nice suits and buildings behind in favor of better borrowing rates.
Although Bird is a DeFi platform, it also falls into the classification of an oracle cryptocurrency. Today I won’t explain what oracle cryptos are in full, but it’s worth a look if you have time. An example of another oracle crypto is Chainlink. The only thing you need to know is that oracles bring real-world data onto the blockchain in a decentralized fashion. Bird also analyzes transactions on the Ethereum blockchain, and provides this data to anyone. This will help connect outside companies and investors to what’s going on on the Ethereum blockchain. This way, they can make better decisions about who to lend money to and at what interest rate.
Is Bird.Money a good investment?
I’m no financial adviser, but I can tell you that there are many factors that make investments ‘good’ for people, for example:
- Providing great returns on a risk adjusted basis
- Providing adequate returns over a specific time horizon (how long are you planning to be in crypto? 1 year? 10 years?)
- Having liquidity so you can buy and sell the crypto whenever you want without too many fees
- Having a real-world use case that works and will gain adoption
- Having some type of innovative or competitive advantage over similar projects
Bird.Money: the good
Let’s go over the pros first. Bird.Money as a small cap crypto has the ability to deliver tremendous returns over time. We’re talking 10x, 100x, or more. Investing in smaller altcoins is an extremely bumpy ride, though. If you believe decentralized finance will continue to gain adoption, Bird.Money is near the top of my list for smaller DeFi projects. Since Bird.Money trades on UniSwap, Gate.io, and PancakeSwap, you also won’t need to worry about liquidity issues or lockup periods. The fact that the Bird token (BIRD) is an ERC-20 token and exists on the Ethereum blockchain is also a plus. The project has hitched its wagon to the network of the second largest crypto by market cap (ETH).
Bird.Money: the bad
The project has some big drawbacks, though. For starters, Bird.Money only has a market capitalization of $7 million. By comparison, Bitcoin has a market cap of $897 billion (128,000 times bigger) and most investors even consider Bitcoin too volatile. Smaller projects mean more turbulence when the seas get rough. If the top 100 cryptos by market cap are a barge, Bird is a canoe. The same coins that can deliver 10x gains can also suffer 90%+ losses when the market corrects. In the May 2021 crypto crash, I held several small cap coins much like Bird that lost 80%+. Since then, I’ve shifted most of my crypto portfolio toward larger caps like ADA, ETH, and Bitcoin. With small altcoins like Bird, I’d recommend a small (single-digit %) portfolio allocation.
Bird.Money: the ugly
Regulation, while good for crypto long term, could create some major headaches for DeFi. The US Securities and Exchanges Commission (SEC) chairman Gary Gensler has stated that he wants to audit and regulate DeFi projects like Bird.Money. US Congress is currently passing legislation that will require DeFi projects to report transaction history. This would slow down DeFi project developments across the board.
Where and how can I buy the Bird token (BIRD)?
The Bird.Money website has done an awesome job in laying out step-by-step guides to get a crypto wallet and buy/lend BIRD! Just click the link and follow the steps:
The Bird Token (BIRD) is the Bird.Money platform’s native token. Like other smart contract and DeFi cryptos, BIRD tokens are used as currency to power the network. Like Avalanche (AVAX) and Cardano (ADA), BIRD is a proof-of-stake token, so if you stake your tokens you’ll be able to earn interest.
Keep in mind that Bird.Money is an ERC-20 token, so you’ll be subject to Ethereum’s insane gas fees when the network is really busy. You can also buy Bird.Money on Gate.io and PancakeSwap.
Why DeFi projects will succeed
In the US, we currently use FICA credit scores to determine people’s interest rates for mortgages, cars, credit cards and more. FICA scores are often poor indicators of repayment because they do not look at a person’s income level or income potential, but rather their payment history, credit age, and other factors. Some of the wealthiest people in the US have extremely poor FICA scores because they’ve paid cash for everything and thus have no borrow history. This is another example of how banks and record-keeping haven’t kept pace with the digital transformation of the last 30 years.
Bird.Money and lending/borrowing
Bird.Money can fetch data from the Ethereum blockchain to analyze the financial history of a borrower. It doesn’t matter what country that person lives in, how old they are, or if they’ve uploaded ID documents. All it cares about is on-chain financial history. This is huge, given there are still 2 billion people in the world who have no access to banking. DeFi has the power to solve these issues. So much of our well-being and progress in life depends on access to good and cheap financing- whether it’s a mortgage or a student loan.
Staking the Bird token
BIRD tokens can be staked on CyberFi for a 4.2% APY at the time of this writing. CyberFi also offers higher-priced Bird Liquidity Provider (LP) tokens that stake at a 31% APY. Think of LP tokens as providing the platform with money so there’s enough liquidity for others to borrow and lend seamlessly.
More on Bird.Money
I’m impressed with Bird.Money’s website and documentation. A lot of projects have wonderful websites designed to inspire investor confidence, but what I’m always looking for is a use case that could work. Barring how much the SEC wants to go after DeFi projects like Bird.Money, I’m confident about this coin’s feature. There are over 9,000 cryptocurrencies listed on CoinMarketCap and it should go without saying that a lot of these coins don’t have much of a future. It’s far easier to invent a cryptocurrency than it is to start a company and take it public and have it listed on a major stock exchange. For this reason it helps to be critical, discerning, and a touch pessimistic when looking at coins outside of the top 10. Bird has a future.