Position Exchange is pleased to announce the release of its bonds feature. Dive deeper into this game-changing DeFi product.
What is a bond?
A bond is a fixed-income instrument representing a loan made by an investor to a corporate or governmental borrower. A bond can be considered an “I owe you” (IOU) between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer.
Bonds and blockchains: Crypto bonds
A blockchain bond is a specific type of automated bond contract using the capabilities of blockchain databases that can operate as cryptographically secure, yet open and transparent.
Blockchain bonds can potentially revolutionize financial markets by creating a decentralized database of unique digital assets.
Issuers of bonds could completely automate the entire bond issuance process through blockchain bonds. This would potentially result in shortened settlement and transaction times and greater transparency for the issuer in transactions. The increased transparency and automation of the process would remove the need for intermediaries and generate increased savings for issuers.
Position Exchange is a decentralized crypto platform aiming to bring different decentralized finance (DeFi) features under one big project to become the decentralized crypto platform of choice. Its focus is on derivatives products, and bonds are a useful financial instrument with stable and predictable income streams and high market demand.
Looking at current DeFi products and projects, there is an abundance of lending protocols providing automatic pools where lenders and borrowers interact. This design is efficient to ensure there is always liquidity available and funds to borrow. However, the return on investment remains low.
Bonds follow a similar format but provide higher, stable returns and are targeted for a larger market. Bonds also have more use cases: They can be exchanged or used for governance, financing and much more. It is a highly useful financial instrument and integrating it on the blockchain can be game breaking!
Position Exchange is introducing its first derivative product: fully on-chain and stackable bonds. Users can purchase bonds and stake them in the bond pool with a stable and fixed annual percentage rate for a determined duration. Once the bonds reach maturity, the issuer will pay back the investment plus interest. The bonds will be backed by assets as collateral and will be locked in smart contracts. Payment to investors when bonds reach maturity will be ensured and guaranteed by Position Exchange.
Users can also exchange bonds on Position Bond Exchange and issue their own. Individuals, companies and projects can lock their assets — tokens, coins, nonfungible tokens (NFT) or even real estate — as collateral and issue position bonds to borrow the money from the investors.
Position Exchange is providing financial solutions to DeFi users and introducing bonds to the blockchain.
Users can find the smart contract source code on GitHub.
Development stages for position bonds
Users will be able to experience fully on-chain crypto bonds and issue, purchase and earn high yields with position bonds.
The bond feature is developed in three main phases:
- Phase 1: Position bonds are powered by smart contracts. Purchase and stake position bonds with high, stable returns. Proposed crypto bonds are standard smart contracts.
- Phase 2: Buy and sell bonds easily and fully on-chain on Position Bond Exchange.
- Phase 3: This phase implements the bonds feature launchpad. Individuals, projects or companies seeking financing and investments can issue their bonds easily on Position Exchange by applying and providing collateral.
Position Exchange in short
Position Exchange is a decentralized crypto platform with an ecosystem that is fully governed by its community. Users can stake, farm, trade, swap and cast NFTs. They can earn and invest in an open, transparent and trustless system that runs fully on-chain.