Flex Yang, the former CEO and founder of Babel Finance, has launched a new decentralized project called Hope, which aims to blend centralized finance (CeFi), decentralized finance (DeFi) and traditional finance (TradFi) to provide transparency and security while offering easy access. The project has a namesake token, which aims to peg its value close to the dollar as adoption grows. However, the Hope token will initially use Bitcoin and Ether as reserves instead of cash and cash-equivalent assets, which are favored by other stablecoins. One of Hope’s protocols, HopeConnect, is a DeFi settlement and clearance application that allows users to trade derivatives within major centralized exchanges (CEXs) without depositing assets on CeFi platforms. The Hope ecosystem will start with investments from outside investors, and Yang will personally invest $10 million out of pocket into financing it.
Hope is being launched in the wake of the downfall of centralized crypto services like FTX, Gemini and Babel itself. Yang is touting Hope as a solution that blends CeFi, DeFi and TradFi to deliver the kind of transparency and security that come with DeFi but provide the easy access offered by CeFi. Yang compares Hope to MakerDAO, the issuer behind the popular stablecoin Dai, but with “a series of added functionalities.”
Babel Finance faced financial trouble last June when it froze withdrawals and redemptions amid the market downturn, citing “unusual liquidity pressures.” Its financial trouble came to light just a month after it announced its valuation had reached $2 billion in an $80 million Series B raise. On March 6, Hong Kong- and Singapore-based Babel filed a moratorium of protection with the Singapore High Court as it sought approval for restructuring. Bloomberg reported citing sources that Babel planned to use revenues from a separate stablecoin, called the Babel Recovery Coin (BRC), to repay debts owed to creditors. Commenting on the Bloomberg report, Yang said that Hope will be staked by Babel but won’t directly repay creditors. Rather, creditors will receive a BRC coin.
Hope is not planning to be part of Hong Kong’s stablecoin ecosystem, which includes efforts in creating offshore yuan-pegged stablecoins. However, it’s “riding the wave of the welcoming atmosphere and increasing regulatory clarity in Hong Kong, which frankly makes it one of the many ideal markets for the Hope Ecosystem,” said Yang. “There’s an evident trend in Hong Kong, the global financial center, and we’re not looking to miss out on this opportunity to tap into Hong Kong’s renewed interest in supporting Web 3.0 innovations.”