ERC-3475 comes out of nowhere, DeFi bond tool gets a new lease on life
1、Traditional DeFi bond dilemma
DeFi, as a product of the crypto world, has a distinctive Web3 color. It is usually regarded as a decentralized version of traditional finance. As a result, savings, lending, capital management, EX, insurance, funds and other businesses in traditional finance can usually find their counterparts in DeFi.
However, bonds, which are also basic financial instruments, fail to get a truly decentralized expansion on top of blockchain due to their own nature.
The issuance of bonds requires a fairly complex data structure, but the industry lacks a technical standard to support the issuance of complex structured bonds. Previously, bond issuance was usually supported by the ERC-20 standard, but the characteristics of ERC-20 itself make it difficult to replicate bond products in the traditional financial sector in Web3.
On the one hand, the ERC-20 standard does not have a complex data structure, so issuing bonds under this standard requires deploying smart contracts for each type of bond separately, according to the type of bond. At the same time, it is almost impossible for compatibility to exist between different classes of bonds. This arguably runs counter to the complex data structure needs of bond issuance. Therefore, it is almost impossible to issue a bond product based on the existing DeFi protocol with a liquidity pool provided by ERC-20 token.
On the other hand, it is also difficult to support storing bond returns and redemption logic all on the chain due to the high Gas fee costs.
Therefore, a new standard that supports complex data structures and multiple redemption functions is essential if bond instruments with complex data structures are to be compatible on the chain.
2. ERC-3475 came out of nowhere
In August this year, the Ethernet Foundation adopted a brand new proposal – the EIP-3475 proposal. Under ERC-3475, any user can customize and issue decentralized bonds and financial derivatives with complex structures, such as futures, options, warrants and swaps.
The proposer of this groundbreaking proposal is D/Bond, a decentralized bond eco-platform.
D/Bond is a decentralized bond ecosystem platform that is committed to building a truly decentralized bond ecosystem for the DeFi market through its proposed ERC-3475 standard. And in the near future, D/Bond will also open the pre-mint of its eco-pioneer, D/NFT.
Therefore, let’s get to know D/Bond and its bearer – D/NFT together today.
D/Bond with ERC-3475
In traditional financial markets, the core value of bonds is to provide users with a relatively stable way to hedge their investments, even if the market is in a deep bear, and to keep the same price anchored to the US dollar, but at the moment, it is still very difficult to do that in the crypto market. And D/bond is committed to this.
As the originator of the EIP-3475 proposal, D/Bond offers a series of DEX, wallet and visual bond design tools based on the ERC-3475 standard. Any institution or individual can design their own bond products for financing through a visual programming interface with extremely low technical and usage barriers.
Based on the ERC-3475 standard, it is possible to create not only standard bonds in the traditional sense, but also financial derivatives with more complex models such as forwards, futures, options, binary options, warrants, and swap transactions. Users can also package existing bonds into derivatives covering different risk-return combinations to be traded on D/Bond DEX.
The rationale behind EIP-3475 is to enable each bond class ID to represent a new configurable token type and correspond to each class one by one, making it realistically feasible to issue bonds with multiple redemption data.
The complex data structure that ERC-3475 has gives the ERC-3475 token the potential to store more bond information, thus supporting developers to build more complex logic for bond redemption and return mechanisms. At the same time, these features also give the ERC-3475 token enough flexibility to support a wide range of redeemable bonds.
Under the ERC-3475 standard, each bond will be assigned a separate algorithm and no additional smart contracts will need to be deployed. This idea of managing multiple bonds in one contract is not only efficient but also more economical, and Gas costs will be significantly reduced.
In addition, under the traditional model, automated market makers (AMMs) typically need to use separate smart contracts and ERC-20 LP tokens to manage trading pairs, which not only reduces the overall liquidity of LPs, but also wastes unnecessary Gas fees and can cause delays in trading due to network congestion.
The ERC-3475 standard is quite different, as it uses a multi-layered liquidity pool to support the creation of numerous trading pairs by larger LPs. Since each bond stores all the necessary data, ERC-3475 eliminates the need to issue separate contracts when adding new LP pairs, which not only greatly improves LP liquidity and saves Gas fees, but also hedges the risk of being attacked to some extent.
D/NFT – a pioneer in D/Bond bond ecology
D/NFT is an equity-based NFT issued by D/Bond. As one of the core assets of the D/Bond ecosystem, holders of D/NFT are entitled to a large number of equity.
There are 11,633 NFTs in this series, divided into 4 tiers: Tier 0, 1, 2 and 3. As the NFT tier increases, its value and utility level will also increase.
1. Value, Utility and Quantity
There are 10,000 D/NFTs for Tier 0, and users can borrow 10 DGOVs Token (worth about $1,000) from the D/NFT pool for each NFT pledged.
For Tier 1 D/NFTs, there are 1,296 D/NFTs and for each NFT pledged, the user can borrow 100 DGOVs Token (worth approximately US$10,000) from the D/NFT pool.
For Tier 2 D/NFTs, there are 256 D/NFTs and for each NFT pledged, the user can borrow 1,000 DGOVs Token from the D/NFT pool (valued at approximately US$100,000).
For Tier 3 D/NFTs, there are 81 D/NFTs, and for each NFT pledged, the user can borrow 1,000 DGOVs Token from the D/NFT pool (valued at approximately US$1,000,000).
In addition to the utility described above, D/NFTs can be converted into voting rights in all D/projects. By casting D/NFT, users will gain access to the initial whitelist of all D/projects.
In terms of Mint, the 4 tiers of D/NFT also correspond to 4 different Mint periods and Mint rules.
Tier 0 D/NFT adopts the public offering for Mint, during its pre-sale period, users can complete Mint at a cost of 0.2-0.5 ETH, while some active users can enjoy up to 100% whitelist discount. After the pre-sale ends, the price of D/NFT will revert to 10 DGovs per coin (worth about $1,000). This will provide value support for the price of D/NFT.
The casting of Tier 1 D/NFT will open one month after Tier 0 D/NFT, which can only be cast by destroying Tier 0 D/NFT in a 10:1 ratio, and the casting process is irreversible.
Tier 2 D/NFT casting will be opened one month after Tier 1 D/NFT, which can only be cast by destroying Tier 1 D/NFT in a ratio of 10:1, and the casting process is irreversible.
Tier 3 D/NFT casting will be opened one month after Tier 2 D/NFT, which can only be cast by destroying Tier 2 D/NFT in a 10:1 ratio, and the casting process is irreversible.
This series of destruction-based casting can effectively reduce the amount of NFT circulation in each level to form a deflationary mechanism, thus forming a strong support for the price of NFT. In addition, there is a certain probability of achieving cross-level casting in the casting process of lower-level D/NFT to higher-level D/NFT.
Through the exploration of the actual utility of D/NFT and the Mint rule, we can find that D/NFT is in a rather central position in the D/Bond ecology.
On the one hand, it is linked to bond instruments and has a certain nature of bond certificates; on the other hand, D/NFT has always maintained close interaction with other asset types in the D/Bond ecosystem and has been in the value pivot.
In addition, its unique grading casting mechanism provides considerable support for the price of D/NFT to a certain extent, which will also drive the development of the whole project.
It is reported that D/NFT will officially open Mint at 23:59 (UTC+2) on September 24, 2022. through the above introduction I believe you have a certain understanding of D/NFT and their own judgment. I hope you do not miss this cross-genre integration of NFT and bond instruments. Chinese community WX: binanceNFTan.
D/Bond, the never-ending road of DeFi’s quest
Regarding the design of the bond instruments, D/Bond has designed a multi-layer liquidity pool that uses a tiered bond strategy, divided into a floating rate pool and a stable rate pool. The stable rate pool has high stability, high security and low interest rates; the floating rate pool is the opposite, but the assets of the floating rate pool can guarantee the redeemability of the stable rate pool assets.
Asset-backed bonds are a fairly segmented track in the bond market of traditional finance. Therefore, the bond layering of D/bond is not actually the bonds themselves, but the subclasses of asset-backed bonds in the bond subclasses MBS and ABS in ABS. the idea of EIP-3475 is actually to defuse a single default risk by packaging all bonds into one pool.
It is no exaggeration to say that the passage of the EIP-3475 proposal has pushed DeFi into a new era. Since then, bond instruments will also take their place in the crypto world, no doubt thanks to D/Bond.
As a decentralized financial platform in the Web3 era, D/Bond does not stop at simple bond instruments, it also innovatively combines NFT with bond instruments in order to break the barriers between tracks and thus achieve more efficient asset interaction.
Its subtle design of the D/NFT model also makes it a unique asset type in the D/Bond ecosystem.
However, in the context of today’s market bearishness, D/Bond and D/NFT will inevitably face huge market pressure, which is the next proposition they have to face.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/nft-bond-instrument-d-nft-may-be-the-optimal-solution-for-landing-erc-3475/
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