Now Live: Season 1 Claims & Single-Sided Staking $xBONZO

Bonzo Finance is an open-source non-custodial lending protocol based on Aave v2 and adapted to Hedera’s EVM and native token services.The protocol launched with supply-only functionality on October 28th, 2024 and achieved the most rapid TVL growth of any DeFi protocol in Hedera's history — ranking #3 by TVL on Hedera within 30 days of launch, prior to enabling any HBAR liquidity incentives. On December 11th, 2025, borrowing went live and the global utilization rate (active loans) grew and settled to ~34.5% of the total supply.

Today, we enter the next phase of Bonzo Finance’s journey with the launch of Season 1 points claims and single-sided staking of $BONZO governance tokens to receive $xBONZO and earn an APY for participating in this activity.

Season 1 Bonzo Points Claims

Season 1 of the Bonzo Points program started at the launch of the Bonzo Finance protocol on October 28, 204 and ran until February 28, 2025. During this time, users earned 8 points per $1 supplied until borrowing was enabled; once enabled, users earned 2 points for every $1 supplied and 8 points for every $1 borrowed. Under this formula, users participating in the Season 1 Bonzo Points program, for approximately 4 months, were rewarded more for borrowing than supplying, and their ranking and total points earned in the Season 1 Points program are reflective of this.Bonzo Finance waited to enable $BONZO governance token claims for Season 1 points until March 17, 2025 (today) to do this in conjunction with the launch of single-sided staking of $BONZO to receive $xBONZO receipt tokens and earn an APY for participating in this activity. The single-sided staking functionality is described in the subsequent sections of this article and found in the Bonzo Finance documentation.

The total number of tokens being distributed for Season 1 was increased from an anticipated 8,000,000 $BONZO tokens to 10,000,000 $BONZO tokens. The distribution model for $BONZO tokens to points used a Concave (√points) regression curve based on points accumulated per account; this regression curve and alternative options are described in the section below.

For more information about Bonzo Points seasons, with 3 in total, please visit the official Bonzo Finance documentation.

Why a Concave (√points) Distribution?

When designing the token rewards schedule for Season 1 Points earners, an evaluation of several models to allocate tokens based on the points earned by each account was taken:A linear distribution—where tokens are awarded exactly in proportion to points—would have given the top 10 accounts nearly 60% of the tokens. This heavy skew not only concentrates rewards in a few wallets but also risks alienating the broader community.

Conversely, a quadratic model (using points²) would have almost entirely favored the highest contributors, while a logarithmic model flattened differences so much that even top performers receive almost negligible rewards.

What was ultimately chosen chose a concave approach (using the square root of points). This method rewards higher contributions while applying diminishing returns. In thorough analysis of actual Season 1 points data, using a 10‑million token pool, the concave model distributes rewards roughly as follows:

Under the concave model, ~15.38% of the 10 million tokens (1,538,216) would go to the top 10 accounts, ~37.55% (3,754,854) to the top 50, and the remaining ~62.45% (6,245,146) would be spread among all other participants. This balanced allocation ensures that while highest earners are rewarded for their significant contributions, the vast majority of the community still receives a meaningful share of the tokens. In turn, this broad distribution helps foster long-term engagement and community ownership while mitigating risks associated with concentration of $BONZO governance tokens.

Single-Sided Staking $xBONZO

Bonzo Finance officially launched single-sided staking of $BONZO governance tokens, to receive $xBONZO receipt tokens, on March 17th, 2025. The launch of single-sided staking represents a significant milestone for the Bonzo Finance protocol that lays a foundation of long-term utility for the $BONZO governance tokens.

Upon launch of the Bonzo Finance DAO later in 2025, the $xBONZO token will represent voting power for protocol governance decisions and proposals. In addition, while not enabled today, the $xBONZO single-sided staking receipt token lays a foundation for potential utility that rewards token holders with protocol fee revenue sharing.

Bonzo Finance’s single-sided staking functionality offers users a dynamic APY that is adjusted based on 1) the total number of tokens staked and 2) the emissions reward rate based on a monthly amount.

As more $BONZO governance tokens are staked for $xBONZO, the reward rate APY decreases. Conversely, as $BONZO tokens are unstaked, the reward APY increases. The total number of $BONZO tokens used for emissions from March 17th, 2025 - April 17th, 2025 is 100,000 $BONZO tokens and this figure will be updated and communicated on a monthly basis, affecting the APY rates.