A crypto-native secondary token and liquidity offering model based on bonds
Bond is a structured protocol-owned liquidity bootstrapping and token liquidation tool for publicly traded tokens. It's a new way to raise capital and liquidity for publicly traded tokens — DAOs, DeFi protocols, and other Web3 initiatives — after initial token offerings.
- Building Protocol-owned Liquidity: Bonds could be used as an alternative to Liquidity Mining to bootstrap protocol-governed liquidity.
- Token liquidation/treasury building: Bonds could be used for liquidating protocol tokens in exchange for strategic assets and stablecoins, helping projects build their long-term treasury.
- Multi-chain liquidity expansion: Projects expanding their tokens to other EVM-compatible chains could use bonds to generate chain-specific liquidity, enabling an easy way for tokens to be multi-chain.
- Secondary DEX listings: Projects that want to list their publicly traded tokens on DEXes could use bonds to finance the liquidity needed to open liquidity pools in DEXes.
- Secondary CEX listings: Projects could use bonds to generate financing for secondary CEX listings.
Tokens are auctioned off at a discounted price with vesting relative to the market in exchange for immediate cash flow.
- Fixed-swap auction: The auction starts and ends with the same discount rate and vesting terms.
- Descending Dutch auction: The auction starts at a pre-determined discount rate and starts decreasing linearly with the purchasers. The more bonds drive demand, the more the discount rate is decreased linearly, creating economic competitiveness for market participants.
The discounted tokens are vested linearly block-by-block to eliminate quick arbitrage opportunities.