Intellabridge Technology Corp C.KASH

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[badgirl007]

This Pure Play Into Decentralized Finance Is Up Over 5000% YTD - Sustainable?

Aug. 10, 2021 11:20 AM ETIntellabridge Technology Corp. (CRBTF)

Intellabridge represents one of the most interesting investments in the market right now.
 
This was an easy company to miss, because by the time you blinked the stock was up over 5000% this year. Its market cap is still under $100 million, which means the company was effectively dead to begin with.
 
This is part of a broader trend in decentralized finance where the market cap of the top players went from $1 billion to $88 billion, according to Forbes. The growth in decentralized finance is astounding, with Kevin O’Leary and Mark Cuban even having both gotten involved. Goldman Sachs just announced a new decentralized finance ETF. However, if you take a cursory glance at its portfolio companies, none of them are directly centering their strategy on decentralized finance and most are speculations or peripheral players at best.
 
Compare Goldman’s ETF to Intellabridge, which is built from the ground up to be the gateway to decentralized finance. It’s clearer now why the stock has generated so much energy across several stock boards like ceo.ca and Telegram. It’s part of this broader social investing phenomenon, which is important to follow as young investors are the first to pick up on trends. Decentralized finance is at a tipping point, and to what we have visibility into, Intellabridge represents the only pure-play into that ecosystem.
 
That’s not to say Intellabridge does not possess merit by itself. If you look into its business model, it promises a 10% interest rate to users for cash deposits. While this sounds preposterous, Intellabridge concisely explains its mechanics in their blog here. To sum it up, the Terra ecosystem accepts only dividend-yielding assets as collateral. These dividend-yielding assets represent 10% APY. In order to “borrow” in the Terra ecosystem, users generally deposit 300% of their borrow amount. It’s an overcollateralized loan, which actually makes it quite safe for depositors as loans can be margin called when the value of the crypto reaches a 1:2 loan-to-value ratio (LTV). Using this logic, there is over 30% APY generated in the system to the corresponding depositor, which greatly exceeds the actual rate of 20%. The difference is placed in an overflow fund meant to use during crisis moments. These funds have been tapped into during the May crash, but borrowing activity will presumably rise back again once the market settles and new features are added (such as acceptance of Ethereum as collateral for loans).
 
Intellabridge only provides 10% of the 20% given out. It can be presumed that they either keep the other half as profit, or use it to provide ancillary services such as customer support which is not available in traditional decentralized finance. The difference in payout is so wide that Intellabridge could potentially even pay for insurance for all its members, an incredibly powerful asset that decentralized finance also lacks today. Essentially, Intellabridge has the flexibility to tailor the value proposition of the decentralized finance protocol to a much wider audience. This is a key point to internalize in this investment thesis.
 
Another intriguing piece for Intellabridge is its target market: corporate treasury. Compare the offerings of a market leader in decentralized finance, Compound, to what Intellabridge offers. The Intellabridge offering is far more sophisticated, and it’s impressive to see such a small team think through subtle nuances like beneficiaries, designated signatories, concierge customer support, and even integrating a “point system” familiar to frequent fliers.
 
There is incredible sophistication to Intellabridge’s strategy, and it’s clearly driven by some deep thinkers in the space. Considering Intellabridge’s various iterations over the years, it looks like the team has learned many lessons and stumbled its way to product/market fit. What I’ve learned over the years is that you bet on the team. What the Intellabridge team is rolling out is impressive, led by a CEO with credentials from the US Department of State, Georgetown University, and BNP Paribas.
 
Finally, Intellabridge raised $10 million recently in a private placement. While this might not seem like much, it actually makes Intellabridge one of the most well-capitalized companies in the decentralized finance ecosystem. Compare this to other Terra ecosystem projects like Orion Money, which raised $1.9 million.
 
The main hurdle will be to assess AUM and user growth over the next year. With its beta distributed to over 1000 users currently, it will be interesting to see how this evolves the company. For comparison, Celsius has around 300,000 active users and a projected valuation of $5 billion. BlockFi raised a Series D earlier this year with a $3 billion valuation and around 225,000 users as its last confirmed number. It will be interesting to follow whether its whitelabeling program in emerging markets or its direct strategy in North America/Europe will eventually be the right fit. This presents incredible risks and makes recommending Intellabridge prohibitive at this stage unless one possesses the appetite (and disposable income) for a VC-level risk. However, as seen from the stock’s 5000% increase this year, Intellabridge also possesses a corresponding potential for VC-level returns.
 
Intellabridge is intriguing, and honestly not the right fit for most investors. It’s analogous in its lifecycle to Tesla before the roadster came out after years of R&D. But for a certain subset of investors, Intellabridge represents one of the most intriguing risk-on assets in the entire market right now. With such levels of asymmetrical upside, it might go down as a career-defining selection.

https://seekingalpha.com/instablog/48200752-small-cap-it/5625642-this-pure-play-decentralized-finance-is-up-over-5000-percent-ytd-sustainable