Position Bonds: Revolutionizing DeFi with Crypto Bonds
Traditional bonds vs Crypto bonds
A bond is a fixed-income instrument that represents a loan made by an investor to a borrower. In other words, a bond is an instrument for issuers to finance their projects and operations. The issuers of bonds vary from companies, municipalities, states, to sovereign governments.
Investors welcome bonds because these provide a predictable income stream so it can add an element of stability to the investment portfolio. Although it is considered to be safer and more conservative to invest in bonds, there is still a possibility for default risk. Credit rating relies on third party agencies like Standard and Poor’s, Moody’s, and Fitch Ratings.
Crypto bonds, with their blockchain-native nature, will potentially revolutionize the traditional bond market in terms of cryptographic-security, transparency and automation.
How does it work?
Leveraging on smart contracts, given the complexities of bond issuance and rating, the efficiency, transparency and automation of the process can still be improved. In addition, by eliminating intermediaries, crypto bond issuers will be able to enjoy a lower cost. More subversively, crypto bonds use DeFi assets and derivatives to design bonds, which is an unprecedented attempt to innovate and revolutionize the diversity of digital assets.
What are Position Bonds?
Although still in its infancy, the homogenization of competition in the DeFi area is already evident. The current DeFi landscape is dominated by products and projects providing Automated Pools where lenders and borrowers interact. However, with the competition getting fiercer, the return on investment lowers.
Specializing in derivative products as a crypto platform, Position Exchange is aiming to enrich the DeFi product choices of the investors. In this way, diversity of the investment portfolio will be improved, so will the investors’ ability to resist risk. Position Exchange is introducing its first derivative product, the fully on-chain and stackable bonds.
In a similar fashion to bond trading, users can purchase and exchange crypto bonds using Position Exchange. Deeply integrated with DeFi, for the next step, users can stake the bond in the Bond Pool with a stable and fixed APR for a determined duration. Once the bonds reach maturity, the issuer will pay back the principle plus interest. To lower the risk of default, various assets back these crypto as collateral and the platform will use smart contracts to lock these assets away. As a result, a bond redemption can be guaranteed.
Exchanging bonds on the Position Bond Exchange is also feasible. And users can even issue their own. Individuals, companies, and projects can issue Position Bonds to fund their business and projects by simply locking their assets (tokens, coins, digital art or even virtual real estate) as collateral.
Why Position Bonds?
Instant Cash Back: Position Exchange bonds provide you with a platform in which you can simply trade or cash back your investment whenever you want.
Fully on-chain: No intermediaries, a fully decentralized, trustless and transparent system powered by smart contracts.
High and Stable return: Enjoy a high and stable return on your bonds by staking them in the high yield Bonds Pool.
Risk Free: All bonds are collateralized by Position Exchange and Payment with interests is guaranteed to bonds holders.
Accessible to anyone: Whether you are an individual, a project or company seeking financing and investment, you can issue your bonds easily by providing a collateral.
First Position bonds issuances: $2.5M of value sold out in few minutes!
The first two issuances of Position Bonds were released on February 2nd by Position Exchange (issuer) with two assets as Face value (BUSD and POSI). Both Bonds were sold out in matter of seconds and met with great community feedback totaling $2.5M of value raised.
After the end of the sale period, the bonds became active and could be staked and transferred. Users were able to stake their bonds in the Bond Pools with a stable and fix APR of around 400%.
The Yield to Maturity of the issued bonds is around 700% which means that for every $1000 invested, users will earn $7000 after the bonds reach maturity (2 years) as long as they keep their bonds staked in the pool for the said period. To note that the staking rewards can be harvested on a daily basis!
Position Bonds in Media
Several Article on different Crypto news platforms were released about Position Bonds during the course of last week. The most notable would be the articles on Cointelegraph, Bitcoin.com, DappRadar and Bitcoinist.
Position Bonds development stages
Users will be able to experience the fully on-chain crypto bonds with Position Bonds. Whether users want to issue, purchase or earn high yield through crypto bonds, Position Bonds will equip them with the one-stop platform they need.
The bond features will come to fruition through three main phases:
- Position Bonds implementation and development for smart contracts. After completion of this phase, users will be able to purchase and stake Position Bonds to earn high and stable returns.
- The Position Bond Exchange, where users can buy and sell crypto bonds easily and fully on-chain on the exchange.
- The Bonds Launchpad. This feature allows individuals, projects and companies to issue their own bonds easily on Position Exchange by submitting an application and providing a collateral.
Check out Position Bonds now: https://app.position.exchange/bonds