Quote the ideas of our Dev team.
1. Bond Pool Mechanism
Bond issuance
The bond issuance is carried out in four steps:
( 1) Asset get mortgaged or withdrawn
( 2) Bond gets minted
( 3) Listed for sale or sells on its own
( 4) Issuance completed
This results in either:
The issuance was successful and the bonds were all bought - OR
The issuance failed, only part of the bond was bought, and the funds were returned to all parties - OR
IF Part of the issuance was successful, the unsold bonds are automatically transferred to the issuer of the bonds
Asset mortgaging or withdrawal
The bond issuer must mortgage the assets before issuing bonds, with the collaterals can be returned at any time before the bonds are minted.
The assets that can be used as collateral are:
OEP-4 homogenized assets such as BTC / ETH / Stablecoins / tokens
Valuable OEP-5 assets.
Other valued bonds (OEP-8 assets) that have been mortgaged but not minted into bonds can be retrieved at any time. OEP-4 and OEP-8 asset bond Issuers can select the quantity when retrieving them. OEP-5 assets can only be retrieved individually.
Bond minting
After the bond issuer has pledged their assets, the bond will begin to be minted.
Bond format: Since there may be a need to raise a large amount of assets, the bond should be separable to be implemented by using an NFT in the OEP-8 format.
The bond issuer must select the type of bond to be issued, bond maturity, loan asset type, annualized coupon rate, bond coupon price, number of coupon periods, fundraising deadline, bond effective date, and redemption deadline.
Bond types are divided into mandatory redemption and negotiable redemption. Negotiable redeemable bonds can only use OEP-4 assets as collateral.
Bond maturity refers to the duration of the bond.
Bonds that have been minted but not yet sold can be directly destroyed to retrieve the collateral.
Bond sale
The bond issuer can choose to sell the bonds publicly in the Bond Pool or sell the minted bonds on their own. Bonds that have not been purchased cannot be transferred freely.
(1) Public sale
The issuer chooses to sell the bonds publicly and needs to pay a fixed amount of ONT to the Bond Pool as an issuance fee. The longer the duration of the public sale, the higher the cost. After the bond is purchased, the purchaserâs funds are transferred to the Bond Pool smart contract, and the bond NFT is transferred to the purchaserâs account.
(2)Self-sell
Self-selling is generally applicable to the directional issuance of bonds. A purchase whitelist will be set up. The bond issuer will copy the bond ID n and send it to the purchasers off-chain. After the purchasers pay, the funds will be transferred to the Bond Pool smart contract, and the bond NFT will be transferred to the purchaserâs account.
Issuance complete
Once the bond is purchased, it is considered to have been issued. If the bond is not completely sold to the buyer after being minted, or the ratio of the bondâs collateral value to the borrowing value falls below the minimum collateral rate during the issuance process, the bond issuance will fail. This results in the bondâs collateral being returned to the issuer and the funds sold being returned to the purchaser.
(1)Successfully issued
All the bonds have been sold, and the proceeds from the bond sales have reached the address of the issuer.
Failed to issue
There is a buffer period of no less than one day between the bond offering deadline and the effective start date, which is called the refund period. If a batch of bonds is not fully sold, or the ratio of bond collateral value to borrowing value falls below the minimum collateral rate, any user can initiate a refund and liquidation during this period of time. Refund liquidation means that both the issuer and the purchaser can withdraw the assets they have spent. Bonds in the state of refund and liquidation will no longer enter the interest accrual period. Since the existence of incompletely sold bonds is not conducive to the overall risk control, the Bond Pool will incentivize users who initiate refunds and liquidation.
For under-issued bonds, even if no refund clearing transaction is initiated during the refund period, the bond cannot enter the interest accrual period. Any user operation will trigger a refund settlement of this type of bond.
Subscribe
The user purchases the bond NFT at its face value on the exchange. The NFT is shared by the bond issuer and the subscriber, while not being able to be destroyed.
After the purchase is completed, the subscribed assets are transferred to the bond issuer and the subscriber can transfer the NFT to anyone for sale on the exchange.
Interest payment
For long-term bonds, the bond issuer needs to pay interest regularly during the bond duration. If the interest unpaid is overdue, the bond will enter a default liquidation process.
During the duration of the bond, the bond issuer is required to pay interest regularly and pay the principal when it matures. The holder of the bond can withdraw the proceeds generated by the bond at any time. After the bond issuer has paid all the principal and interest, the bondholder can withdraw the principal by destroying the bond.
Timed interest payment
When the bond is issued, after the issuer set up the interest period, smart contracts will calculate each interest payment . The issuer needs to pay a certain amount of interest within the period of each interest payment period, otherwise it will be deemed as a breach of contract.
If it is the last interest payment, the issuer can repay the principal and interest at the same time to redeem their collateral.
Bondholdersâ exercise of negotiable redeemable bonds
For negotiable redeemable bonds, bond holders candestroy the bond to obtain collateral during the holderâs exercise period.
R edemption
After the end of the bond interest calculation (if it is a negotiable redeemable bond, then it is after the holderâs exercise period), the bond issuer can redeem its collateral, repay the principal and interest, and the NFT will be destroyed.
The bond issuer cannot redeem this in advance, but they can pay interest in advance.
Withdraw income and principal
If only interest can be withdrawn, the bonds will not be destroyed after the interest is accredited. If the principal and interest can be withdrawn, the bonds will be destroyed after the principal and interest are received.
Settlement of interest on bond transfer
The first version will not develop the bondâs secondary market, but it will be considered in the later version.
Since Bond Poolâs bonds are issued based on the blockchain and are expressed as partially homogenized assets, the bonds can be transferred freely. If the transfer is a bond within the duration, and the bond still has interest in the Bond Pool smart contract and has not been withdrawn by the current holder , at this time, if the bond holder transfers the bond, the undrawn interest will enter the original holderâs account, and will not be transferred to the new holder.
After the Bond redemption period expires, the bill defaults. At this time, the bond purchaser can obtain all the mortgaged assets and the NFT will be destroyed.
There are two cases which result in defaults: a failure to pay interest on time and a failure to redeem collateral on time.
For indivisible assets (OEP-5 and OEP-8 assets), after the issuer defaults, bondholders can initiate liquidation, conduct collateral auctions, and repay the principal with the amount obtained after the auction. The collateral auction adopts a âDutchâ auction, where the highest price, the lowest price and the duration are negotiated by creditors.
For divisible homogenized assets (OEP-4 assets), after the issuer defaults, any bondholder can trigger liquidation. The liquidation process will distribute all collateral evenly to all bonds.
OEP-4, OEP-5, and OEP-8 assets cannot be liquidated at the same time.
When the rights and interests of bondholders are damaged, they can be paid through insurance. The first version of the Bond Pool will not support the insurance function.
2 . WING Incentive Distribution
The first phase will be a trial version, with 6 WING tokens to be released to the Bond Pool every day, so the total incentive over 30 days will be 180 WING. It will be divided equally between the bond issuer and purchaser, and distributed to each purchaser in proportion to the capital contribution. The released incentives will not compete with other pools for the time being, and will come from the unallocated WING fund, created from the rate adjustment in the initial stages of Wing.