The traditional bond market is an investing area where most don’t meet the criteria. Governments and fund managers are the only players that can issue bonds.
DeBond aims to disrupt this by introducing a P2P bond-securitized loan platform.
Anyone is eligible to issue a debond (decentralized bond) and use their digital assets as collateral. Digital assets can be ERC-20 tokens or ERC-721 NFTs — You can use a bored ape NFT as collateral to get a bond loan.
DeBond’s collateralization aspect adds more options in decentralized borrowing as there are different types of crypto assets, and investors may favour some over others. This initiative increases the chance of DeBonds getting purchased.
Bonds are new to the crypto marketplace. There are only a handful of projects creating decentralized bond solutions. But the DeBond project seeks a holistic solution by inventing the ERC-3475 token to represent decentralised bonds.
ERC-3475 tokens according to Ethereum.org:
“A single contract includes any given number of bond classes, bond nonce, bond balance of an address. This standard provides independent functions to read, transfer any collection of bonds, as well as allow bonds to be redeemed from the bond issuer if certain conditions are met.” — Yohji Sakamoto.
Essentially, the ERC-3475 contract uses autonomous functions to behave exactly like a bond that holds collateral. ERC-3475 tokens give debonds the freedom to not be exclusive to a single platform.
Therefore, DeBond bondholders can trade their bonds on a secondary market and choose to sell all or a fraction of their bonds. Debonds fractionalization feature makes it easier for investors to sell their bonds at reasonable prices and decreases the chances of lacking exit liquidity.
The ERC-3475 token also allows users to create bond derivatives of futures, swaps, options, and other financial instruments, including off-chain derivatives.
The decentralized bond market introduces new ways for investors to receive predictable returns over time. It advances the DeFi lending space and provides features that lenders and borrowers can’t get anywhere else.
The DeBond project is repopularizing bonds and giving the world access to loans. Any investor can specify the terms according to their needs without third-party approval.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
