Telos, a blockchain community and platform, immediately introduced the launch of T-Bond NFTs, a brand new fusion of DeFi and NFTs as a software for unlocking liquidity. T-Bonds permit tokens to be locked into transferable Non-Fungible Tokens (NFTs) which are then unlocked when the maturity date or different maturity situations are met. These T-Bond NFTs will be bought or traded on secondary markets for funding or as a yield hedge for tokens providing staking rewards, very similar to U.S. Treasury Bonds or “T-Payments.”
Right this moment, initiatives face important challenges when fundraising within the cryptocurrency ecosystem. A typical situation is when a undertaking sells tokens at a reduced charge to help a technical milestone, similar to a mainnet launch. As the corporate then makes tokens out there via exchanges, patrons instantly capitalize on any early low cost they obtained by promoting their tokens. This undermines the purpose of the unique token sale, which is to sustainably help the undertaking’s long-term progress.
T-Bond NFTs resolve this by permitting cryptocurrency initiatives to promote tokens which are locked in an NFT till the T-Bond’s maturity situations are met. Whereas the commonest maturity situation could also be a particular date, it can be primarily based on milestones similar to the discharge of a undertaking’s testnet, mainnet, or different technical function, or perhaps a particular token value.
If a purchaser wants entry to liquidity earlier than the maturity situation is met, they’ll merely promote their NFT on any supported secondary market. A T-Bond NFT can change arms as usually as wanted till its lifespan is reached, at which period the present proprietor can unlock its liquidity.
“T-Bond NFTs supply a brand new and highly effective possibility for any undertaking searching for funding primarily based on future technical achievement. Again within the ICO growth and persevering with nonetheless, far too many initiatives have raised funds solely to see their token plummet in worth and neighborhood help dwindle. T-Bond NFTs create an ecosystem the place initiatives can increase funds via buyers, who in flip have the liberty to promote their NFTs on the secondary market with out impacting the token value. This facilitates a vastly extra sustainable mannequin by harnessing the brand new synergy between DeFi and NFTs.”
– Douglas Horn, Chief Architect of the Telos blockchain
DAOs or crypto initiatives of any variety can subject T-Bonds
T-Bonds have a lifecycle with three durations: Creation, Maintain/Commerce, and Maturity. T-Bond NFTs are bought by their issuer to an preliminary purchaser for one more forex at a reduction to compensate the issuer for the illiquid nature of the underlying tokens. T-Bond NFTs aren’t technically a bond, as a result of in contrast to a bond, which is a debt instrument, a T-Bond transfers possession of the underlying tokens every time the NFT is bought, so there’s by no means a debt created.
Like bonds, the valuation of a T-Bond NFT is the operate of its face worth associated to its anticipated time to succeed in maturity relative to various types of yield. With tokens that provide staking rewards, T-Bonds can see their current worth rise if the staking reward yield drops, and vice-versa, creating a possibility for hedging or speculating on yields.
The primary use of T-Bond NFTs will probably be by Telos itself because it makes use of present TLOS reserves to create a big ETH/TLOS liquidity pool on Uniswap as a part of the newly launched TULIP plan. The sale will probably be organized inside two weeks. Extra data on the inaugural TLOS T-Bond NFT sale will probably be introduced inside 48 hours earlier than the sale commences on telos.web, the place there’s additionally extra data about the right way to take part. The Telos staff believes others will comply with, utilizing the open-source instruments and docs offered by the community.