Buckets, the goal-focused DeFi savings app is finally here!
Buckets fills the gap between your savings and your personal goals with DeFi-powered interests.
We’ve all heard the few stories of newly made crypto-millionaires, right? But do we know how many lost their savings trying to become one? Probably not.
There’s definitely a similarity in both groups, and that’s risk-taking. However, investment risk is often underestimated — if not misunderstood — and the 2022 bear market has shown that’s dangerous for your money. Knowing your ability to take risks starts with defining your financial goals.
Introducing Buckets.digital, a Decentralized Finance (DeFi) app that lets you choose investments based on your goals.
If “blockchain”, “DeFi”, and “cryptocurrencies” sound funny to you, have a look at our Medium article explaining what they are and the risks associated with them.
The opportunity ⭐
A successful wealth plan consists of three steps: setting financial goals, designing a plan to accomplish them, and implementing it.
In this process, Traditional Finance (TradFi) has long been associated with high entry barriers and friction costs. A combination of custody fees, management fees, third-party fees, and other hidden fees can lead to significant amounts. In addition to reducing costs, technology makes it easier to reach customers.
On top of this, DeFi has proven that decentralizing financial services at scale is possible. The few pioneers in lending protocols are great examples. Indeed, decentralized institutions like Maker DAO and Aave have shown greater resiliency than some of their centralized counterparts in the 2022 bear market. That’s exciting for the future of finance!
With Buckets, automating parts of the investment process using smart contracts lets you focus on what really matters: your personal financial goals. Guess what? Blockchain technology makes this automation easier than it used to be.
Hey, you might say, “I already know that”. In fact, numerous protocols already use technology to solve global financial inefficiencies. Rather, today’s opportunity is to build on top of these solutions, with one vision:
The focus should be on improving the user experience!
How? Here’s one way:
Cheap trading services have made financial assets more accessible, which is great. However, both new and experienced investors in digital assets struggle to weed out the good from the bad in the vast sea of DeFi protocols. Why? Because of a lack of proper tools to deal with investment suitability in the crypto space.
Enter Buckets.
The mission 🗻
Buckets makes it easier than ever to manage your money with personal goals in mind.
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Our mission is to help people save more money by automating parts of the investment process with smart contracts and providing a fun and gamified experience of managing savings. We have a proprietary algorithm that allocates savings into goals and assesses the suitability of investments.
Buckets helps in 3 ways:
- It provides measures of investment suitability and risks that the user can adopt and interpret
- It benefits from blockchain technology with transparent and cheap transactions, as well as no custody (you keep control of your assets!)
- It improves the saving experience with well-designed tokenomics for the gamification of personal finances (coming in v2)
TLDR: Buckets promotes a sound financial discipline powered by DeFi, in a fun and seamless way.
The Protocol 📈
The protocol is built on the premise that a successful investment strategy is the result of understood risk exposures. A well-constructed portfolio should consider several aspects:
- Goals: what are you trying to achieve with your investments? (Build an emergency fund, buy a car, retire early, …)
- Time horizon: what is the expected timeline for each goal?
- Priorities: should your goals be achieved with certainty at the time horizon or would you allow some slack?
- Risk: are you comfortable with high volatility?
This approach is commonly referred to as a goal-based allocation or bucket savings. It differs from traditional methods often applied in TradFi, which only considers the risks and returns of asset classes. The goal-based framework incorporates insights into behavioral finance, which accounts for individuals’ cognitive and emotional biases, leading to more suitable solutions.
Buckets provides an neat user interface for implementing a goal-based allocation. Initially, the framework suggests a saving plan that achieves the objectives without investments, then gives the option to add them. At any time, users can monitor their progress through a best-in-class portfolio tracker. The cherry on the top? Future releases will allow users to challenge their friends and enter into savings competitions!
The wrap-up 🖋️
We’re super excited for you to try out the app! Looking forward, the protocol revolves around 2 priorities:
- build a playful and intuitive experience for creating and managing financial goals with challenges, competitions, and social interactions.
- suggest state-of-the-art and appropriate investment solutions.
The roadmap starts with the testnet launch of Buckets (alpha version). The next step will include the mainnet launch (beta version), as well as the design and release of tokenomics — currently underway — to support the two priorities stated above.
As the Founding team, we strongly believe the most important thing is the value created for users. When it comes to Buckets, we’re aiming for long-term goals, not short-term gains. Creating value will always stay on top of our minds!
Thanks for reading and looking forward to seeing you at Buckets!
