What is Bounce Finance? Unveiling the Secrets of Its Success in the BTC Ecosystem

Introduction

The development of inscriptions and BTC Layer 2 has sparked market interest and enthusiasm in the Bitcoin ecosystem, leading to a resurgence of older projects that leverage their strengths to position themselves within this ecosystem. Bounce Finance is one such example. As an auction protocol, it recently announced a brand update and launched multiple products, including a Bitcoin ecosystem IDO platform. Recent IDO projects like $MUBI and $BSSB have seen approximately a tenfold increase in value. The native token of Bounce Finance, $AUCTION, surged from around $6 in October to $45.92 (as of December 21, 2023), marking an increase of about 700%. This article delves into the secrets behind the success of Bounce Finance.

What is Bounce Finance?

Bounce Finance is a multi-chain decentralized auction protocol founded in 2020 by two experienced co-founders, Jack Lu and Ryan Fang. Focused on auction as a service, Bounce Finance offers a variety of auction products, including token and NFT auctions, real-world collectible auctions, advertising space auctions, as well as SDKs and plugins. Moreover, Bounce Finance provides Private Launchpad services, an on-chain solution designed to streamline new project IDOs. In December 2023, Bounce Finance announced a brand refresh, repositioning itself as an auction protocol for the Bitcoin ecosystem. It declared its commitment to nurturing the BTC ecosystem, with a future focus on incubating and supporting auction services for BTC ecosystem projects.

Source: Bounce Finance Medium

Team and Supporters

Bounce Finance was co-founded in 2020 by Jack Lu and Ryan Fang. Ryan Fang is also a co-founder of Ankr and PrimeBlock and has been recognized with the Forbes 30 under 30 award. Jack Lu is a co-founder of Chainswap and several other blockchain projects. He specializes in researching blockchain mechanisms used for generating decentralized consensus and the real-world impacts of blockchain. He is adept at analyzing the economic and social models behind projects and also explores themes in game theory, including incentive clauses in blockchain and smart contracts, industrial organization, and market microstructures. In 2021, the company received investments from Coinbase Ventures, Hashed, Fundamental Labs, Danhua Capital, Blockchain Capital, SNZ Holding, Pantera Capital, and other VCs. In this funding round, Coinbase Ventures was the lead investor. In April of the same year, they invested in the full-stack DeFi platform BSCStation on the Binance Smart Chain.

Core Product

Before its brand overhaul, Bounce Finance’s core offering was Auction as a Service. In the brand update released by Bounce Finance on December 6, the core products for its expansion into the BTC ecosystem are categorized into three segments: Bounce Bit, Bounce Auction, and Bounce Box, with the auction protocol becoming a part of Bounce Auction.

Bounce Bit

Bounce Bit is a blockchain solution specifically designed for the Bitcoin ecosystem. Based on Binance Bitcoin (BTCB) and supported by $AUCTION, the core of Bounce Bit is its strategic deployment on Bitcoin. It involves a BEP2/BEP20 asset that is pegged 1:1 to Bitcoin and locked on the Bitcoin blockchain.

This approach addresses a significant limitation of Bitcoin - its relative isolation from the DeFi ecosystem. Acting as a bridge, BTCB allows Bitcoin holders to maintain their investment in BTC while participating in the DeFi space. This integration is crucial for offering new avenues for profit generation and utility to Bitcoin users. By locking BTC and using BTCB, investors can engage in DeFi activities without relinquishing their Bitcoin positions, thereby leveraging potential price gains.

Source: Bounce Medium

Bounce Auction

In Bounce Finance, users can participate in various auctions simply by registering. Businesses and individuals can also integrate the plugins provided into their websites to conduct their auction activities.

Source: https://auction.bounce.finance/

Bounce offers the following types of auction mechanisms:

Fixed Price Auction: This type of auction involves assets being sold at a price pre-determined and agreed upon by the auctioneer and participants. It is often used when the auctioneer has a specific value target for the asset being sold.

English Auction: In an English auction, the auctioneer starts with a lower price and gradually increases it until a bidder is willing to pay the highest amount. The auction usually has a set end time, and the person with the highest bid at that time wins the auction.

Dutch Auction: Also known as a descending price auction, a Dutch auction starts with a very high price, which is gradually reduced until someone makes a bid. The first bid wins the auction (assuming it is above the reserve price), avoiding any bidding wars.

Sealed Bid: Bounce offers sealed bid auctions on the blockchain, which differ from traditional sealed bid auctions. When the pool time expires, the final results of the sealed bid auction are revealed. Smart contracts automatically fill bid orders from the highest bid ratio downwards until all tokens in the pool are sold.

Random Selection Auction: Bounce’s random selection auction is an auction mechanism where the winner is not the highest bidder but is determined randomly, like a lottery. Hence, it is also known as a “lottery auction”. This type of auction is typically used for items that are highly popular and have many bidders willing to pay a high price.

On-Chain Order Book Auction: An on-chain order book auction is conducted on a blockchain platform, where buyers and sellers place orders to buy or sell a specific asset. These orders are matched according to specific criteria.

Reference: In-Depth Analysis of Bounce Finance: The Rising Bitcoin Ecosystem IDO Platform - ChainCatcher

Bounce Box

Although Bounce Box has not been officially launched yet, the information disclosed so far indicates that it is a one-stop DeFi platform.

Prominent Product - Private Launchpad

The IDO function appeared in 2021 with the launch of Bounce V2, enabling project teams to conduct token issuance and crowdfunding activities on the Bounce platform. As seen in the 2023 review above, Bounce has conducted multiple IDO sales on various public chains. The most notable ones are the recent projects related to the BTC ecosystem: $MUBI, $BSSB, and $BDID. As of the writing date (December 27, 2023), the launch edition is conducting an IDO for $AMMX, and the Web3 social data layer tool, Port3 Network, is about to have its IDO.

Sale Rules

The basic IDO rules of Bounce Finance are consistent. We will take the recently released $BDID rules as a case study.

A total supply of 400,000,000 $BDID is allocated to 3 auction pools:

$AUCTION Lottery Auction

The core principle is random allocation. There are 20,000 tickets available, and users can stake $AUCTION after linking their wallets, joining the auction pool, and clicking “bid” to participate. At the end of the auction, winners are randomly selected to qualify.

$AUCTION Staking Auction

During the subscription period for tokens launched on Bounce, participants can participate by submitting $AUCTION tokens. Each participant’s token allocation is calculated based on the amount of $AUCTION they commit. After the subscription period ends, Bounce Finance deducts the corresponding $AUCTION from each participant’s account and refunds any additional fees. Then, users can collect their allocated tokens and any remaining $AUCTION tokens (if any).

$DAII Staking Auction

This follows the same principle as the $AUCTION Staking Auction mentioned above, except that the staked asset is $DAII instead of $AUCTION.

Tokenomics

Bounce Finance possesses its proprietary platform token, named $AUCTION. As per the information and data from ETHScan, the total supply is 10 million, with a current circulating supply of 6.5 million.

Source: Etherscan，2023.12.27

The utilities of the AUCTION token include:

• Governance Voting: Each AUCTION token represents one vote in the governance process of the Bounce platform. The more tokens held in a wallet, the greater the holder’s voting rights and influence on proposals.
• Transaction Medium: Pool creators can opt to receive auction proceeds in $AUCTION tokens.
• Exclusive Auctions: Creators can pledge their $AUCTION to promote and draw attention to their activities among platform users.
• Bounce V3 Membership: Members can get verified and gain access to the platform.
• Staking for Shared Revenue: Staking AUCTION tokens allow earning rewards from the protocol fees generated.
• Participation in IDOs: IDOs on Bounce Finance require users to stake $AUCTION as a condition for obtaining allocations.

Development Milestones

In 2023, the Bounce Finance team, with their strong execution capabilities, launched multiple products, strategically chose the BTC track, and achieved success. Let’s review Bounce Finance’s actions in 2023. The Bounce 2023 Roadmap, released in December 2022, highlighted the upgrade of its V3 mechanism.

• In January, a collaboration with Salus Security was announced.
• February saw the early access of V3 and its public opening on the 20th, along with a partnership with game studio Test Jar Labs.
• March included support for Arbtrium, Polygon zkEVM, and in the following months, Kava, Moonbeam, zkSync, and other public blockchains.
• April’s collaboration with Web3 data infrastructure provider BlockVision.
• May hosted the BladeDAO IDO, the first on zkSync, followed by the innovative Playable Auction.
• The TypeIt IDO was conducted at the end of June.
• July saw the Deelance IDO; partnership with Wen3 native luxury brand FOUNDO; loyalty and ambassador programs.
• August introduced the Mutant English Auction and a diamond bracelet auction.
• September featured the iPhone 15Mutant English Auction and the launch of Bounce Token Toolbox.
• October brought the Bounce Telegram Bot; Create Protocol’s $CREATE public offering on Bounce Finance.
• November saw DIP Exchange’s $DGT, MultiBit Bridge’s $MUBI, and BitStable’s $BSSB tokens launched on Bounce Launchpad.
• December included a brand update announcement on social media and the introduction of three core products: Bounce Bit, Bounce Auction, Bounce Box; GoDID’s $BDID, and a joint launch of $AMMX by BitSwap and Ladder on Bounce Launchpad.

This information is sourced from Bounce Medium, as of December 27, 2023.

Overall, Bounce Finance has shown robust action, an excellent grasp of hot topics, and launched relevant products during the hype of Telegram Bots. Moreover, the frequency of its IDOs is high, with the team handling multiple businesses simultaneously. In 2023, they not only launched several IDO projects but also upgraded their core auction protocol multiple times and expanded into more ecosystems.

Future Prospects

Looking at the industry background, the BTC ecosystem is flourishing. This is evident from the recent surge in the popularity of inscriptions and the development of expansion and asset issuance technologies like Stacks and RGB Protocol. The number of developers and community participants has reached new heights.

Of course, other Launchpads have emerged in the Bitcoin ecosystem, such as the veteran AMM and NFT exchange Bakery Swap on BNB Chain and the newly born Launchpad platform TurtSat. Compared to these, Bounce Finance’s advantage lies in its rich experience in IDO and a well-established and mature auction technology framework. However, the core factor in the competition among IDO platforms is the return on the projects they launch. Due to the limited number of projects launched by other platforms, Bounce Finance has recently achieved impressive returns from its listings.

Following its brand update, Bounce Finance did not cease its other operations; on the contrary, it actively embarked on new ventures. Its collaboration with Binance in BTCB will inject new vitality into the Bitcoin ecosystem, which is deficient in DeFi infrastructure. As a multi-chain auction protocol, its increased prominence in the thriving Bitcoin ecosystem also enhances its brand recognition, thereby promoting the expansion of its auction business on other public blockchains. The team’s strong capability for action is evident from the earlier event review, suggesting a promising future for Bounce Finance.

Conclusion

With the rapid development of the Bitcoin ecosystem, Bounce Finance has proven its status as a leading multi-chain auction protocol. Through a series of strategic moves, such as rebranding, launching new products, and collaborating with other blockchain technologies, Bounce Finance has not only secured its place in the Bitcoin ecosystem but has also successfully expanded its influence in the entire cryptocurrency domain.

As a typical innovative project, the story of Bounce Finance inspires the entire blockchain industry, showcasing how to maintain a leading position by flexibly adapting to market changes and continuously optimizing products and services. As cryptocurrency and blockchain technology continue to evolve, we can expect Bounce Finance to achieve even greater success in this dynamic and challenging field.