Tezos Bonds


Programmable time-locked payment smart-contracts (i.e. Bonds), written, issued, fulfilled and enforced on the Tezos blockchain

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Tezos Bonds — FAQ

  • What are Debt Securities? - Debt securities are one of 3 types of securities — the other two being: Equity securities (Stocks) and derivative securities (Futures, Options, Swaps). Most derivatives are based on debt-securities
  • What are Bonds? - Bonds are the most popoular form of Debt Securities. There are generally 2 parties involved — purchaser and seller.  The purchaser of the bond, effectively buys debt from the seller. The seller takes cash from the purchaser, and the terms of the bond stipulate the repayingment plan, including interest earned for the purchaser. The purchaser buys bonds in the expectation that the interest earned would lead to net-profit for them.
  • What kinds of bonds are there? - Treasury bonds, Corporate bonds, Municipal bonds. Zero-coupon bonds.
  • What kinds of bonds will Tezos.Bond issue? - We will start by issuing an on-chain equivalent of treasury bonds for the benefit of USD Tez (USDtz) reserve. Specifically, an alternative to T-bills (treasury bills) called TZ-bills.
  • What is special about treasury bonds? - Treasury bonds issued by the United States Treasury, for example, are widely considiered throughout the world as the most stable and secure type of bond, becuase they are backed by "the full faith and credit" of the United States Government.  Inasmuch as the United States Dollar is the default underlying global standard of currency, treasury bonds are the default underlying standard fo global debt securities. Whenever the US Treasury needs to mint more cash, they can sell T-bills to the American people.
  • What is a T-bill? - T-bills (treasury bills) are the most popular form of treasury bond issed by the United States Treasury. You cean learn more about T-bills here.
  • What is a TZ-bill? - TZ-bills are similar to T-bills in purpose. Instead of generating quick funds for the US Treasury as T-bills do, they generate those funds to help multiply the USD Tez collateral reserve (which targets 4:1 collateraliziation of all USDtz in circulation). Just like T-bills, TZ-bills are auctioned in a Dutch Auction fashion, and the buyer pays a principal amount for a TZ-bill which will reach a designated larger amount at a designated time maturity.
  • When do TZ-bills mature? - Like T-bills, TZ-bills will auction multiple classes of TZ-bill segmented by time-to-maturity, respectively. Unlike T-bills which designate a maturity date as according to a traditional gregorian calendar (weeks, months, years), TZ-bills will mature at a designated block-time — that is, after a certain number of Tezos block cycles, the translation of which can more or less be estimated. Each cycle in Tezos typically lasts around 3-days, though this varies. In the beginning, TZ-bills will be offered for very short-terms till maturity. These yield-time offerings will lengthen over time as TZ-bill auctions become more competitive.

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