How It Works
The Bond Voucher is the world’s first on-chain bond to bridge TradFi with DeFi and Solv’s debt SFT tailor-made for crypto market makers, VCs, asset management protocols, or DAOs seeking to bootstrap liquidity, exercise market-neutral trading strategies, or fund operational expenses.
The Bond Voucher provides a zero-coupon bond with credit enhancement optionality including collateral, insurance, and custody services, that brings maximal flexibility to build up the credit profile of an issuance and fast-track lending processes. An institutional borrower can issue debt capital through a Bond Voucher, customizing key financial terms in a no-code front end. A Bond Voucher is an NFT that represents the lender’s financial claims on the underlying bond.
The ERC-3525 Bond Voucher leverages the descriptive features of an ERC-721 token, providing visualized, customizable financial terms such as the face value and maturity date, as well as the quantitative attributes of an ERC-20 token, enabling the lender to invest in any amount or cash in their position in an open market at Solv.
As all issuances and repayments are on-chain, borrowers will build up their creditworthiness via an immutable trail of on-chain debt transactions. As DeFi grows in the coming, this on-chain credit will become valuable for borrowers to get better terms in the debt capital markets. Similarly, lenders will establish a good on-chain record of loan execution and be attractive to borrowers who are looking for experienced lenders.
Bond Voucher issuers have access to the extensive investor and lender network on the Solv platform. They include top-tier funds, market makers, asset managers, and traditional financial institutions, some of whom are investors in Solv.
Participants in the Bond Vouchers market will have access to the necessary debt capital infrastructure at reduced costs on the Solv platform, including top-tier, third-party custody, and insurance providers.
Bond Vouchers are semi-fungible. They can be split up into multiple NFTs and sold in parts or whole if the lender wishes to receive early liquidity before bond maturity.
Dashboard for borrowers and lenders to see their real-time portfolio positions and upcoming maturities.
Participants in the Bond Vouchers market will receive Solv token incentives so that borrowers reduce the net APR paid and lenders receive an increased APR.
Borrowers and lenders of the Bond Voucher can conduct off-chain price discovery before the bond is issued or auctioned.
During the Bond Voucher soft launch period, nearly US$30 million was raised via Bond Voucher issuances by five partners with US$11 million repaid to date. The Bond Voucher is in the process of bridging TradFi’s US$120-trillion-dollar credit market to DeFi.