Flex Yang, the former CEO and founder of Babel Finance, is leading efforts to restructure the now embattled crypto asset unicorn as he introduces a new decentralized project in hopes of avoiding some of the flaws of his previous venture.

In light of the demise of centralized crypto services such as FTX, Gemini, and Babel itself, Yang praises Hope, which combines centralized finance (CeFi), decentralized finance (DeFi), and traditional finance (TradFi) to provide the kind of transparency and security to come with DeFi but offer the easy access offered by CeFi.

The project has a namesake token, which aims to eventually 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 assets, which are preferred by other stablecoins. The approach may raise some eyebrows.

Yang compares Hope to MakerDAO, the publisher behind the popular stablecoin Dai, but with “a range of added functionality”.

For example, one of Hope’s protocols, HopeConnect, is a DeFi settlement and settlement application that allows users to trade derivatives within major centralized exchanges (CEXs) without depositing assets on CeFi platforms.

“That means no CEX hold, no user credit risk, while bringing CEX trading experiences to DeFi. Users can access CEX liquidity in anonymous and decentralized ways,” Yang told CoinTech in an interview.

Hope starts today. Yang confirmed that while the ecosystem will begin with investment from outside investors, he will personally invest $10 million out of his own pocket to fund the Hope ecosystem.

Refinancing

Last June, institution-focused crypto asset manager Babel froze withdrawals and redemptions amid the market’s downturn, citing “unusual liquidity pressures”. The financial troubles came to light just a month after it announced that its valuation had hit $2 billion in an $80 million Series B raise.

On March 6, Hong Kong-Singapore-based Babel filed a moratorium of protection with Singapore’s Supreme Court seeking approval for restructuring.

Bloomberg, citing sources, reported that Babel planned to use revenue from a separate stablecoin, the Babel Recovery Coin (BRC), to repay debts owed to creditors.

Commenting on the Bloomberg report, Yang said Hope will be deployed by Babel but will not directly repay creditors. Instead, creditors receive a BRC coin.

According to Yang, the team behind Hope, which consists of former Babel staff, will receive 30% of the leveraged tokens (LT) with a four-year vesting schedule. The team locks all of their LTs to vote escrowed tokens (veLTs) to run Hope’s Decentralized Autonomous Organization (DAO). As a result, they will receive the income from the DAO as part of their VELT entitlements.

Subsequently, 10-20% of the revenue received by the team will be used to buy back BRC two years after Babel’s court-approved restructuring, the founder added.

Bet on Hong Kong

A wave of Asia-based crypto companies is rushing to increase activity in Hong Kong as the region signals its ambition to be the next regional hub for digital assets. While Hope does not plan to be part of Hong Kong’s stablecoin ecosystem, which includes efforts to create offshore yuan-pegged stablecoins, it is “going along with the wave of the welcoming atmosphere and increasing clarity about the regulations in Hong Kong, frankly making it one of many ideal markets for the Hope ecosystem,” says Yang.

“Also keep in mind that the Hong Kong dollar is essentially the world’s largest USD-pegged stablecoin. Hong Kong regulators know how these things work and, crucially, how to regulate such currencies,” the founder continued.

“There is a clear trend in Hong Kong, the global financial hub, and we don’t want to miss this opportunity to capitalize on Hong Kong’s renewed interest in supporting Web 3.0 innovations.”