(Nothing in here should be considered financial or investment advice and as always, please do your own research before putting your hard earned capital to work)
What if any project, protocol or DAO could raise funds without selling their native tokens? What if you, yes you, could get access to bear market resistant assets?
Well today you can with Bondie
Why wouldn’t a project, protocol or DAO want to sell their treasury tokens, it’s so easy?
There are 2 very simple reasons why they might not want to.
- They can’t.
- They don’t want to.
They can’t:
They have been around for 3-5 years and are running low on treasury tokens. They are generating revenue, nearing the end of their token runway and need a low risk way to fund long term growth.
They don’t want to:
Selling tokens, especially governance tokens, is not a good idea if a project, protocol or DAO wants to maintain control of their project, the development direction of the protocol, and if it’s a revenue share token like xSUSHI, future revenue.
If they are bullish on their project, as almost all team members are, selling project tokens today takes away future alpha in token appreciation. Selling tokens at scale would also dramatically impact the market price - a market sell of 2% of the UNI treasury would decrease the market price by over 80%, putting into question the purchasing power of the large treasuries of these DAO’s.
Furthermore, it’s just not sustainable to sell tokens to fund operations long term as most governance tokens are finite, and will thus at some point, run out of tokens to sell.
Are bonds even used in the real world?
Bonds are a massive backbone of the world economy, yet have almost no presence in the crypto economy. Having a robust bond market is a quality of a mature market in developing nations in the regular economy. It’s a $120 trillion industry globally with over $40 trillion in the US alone. It’s 50% larger than the entire stock market, yet has gotten little to no attention in the crypto world. The bond market is a core component of corporate, and government funding for growth. Bonds even date back to around 2400BC in Nippur, Mesopotamia & it guaranteed the payment of corn by the maturity date, assured by the surety.
Oh boy, have times changed 🥹
Why would someone want to buy a nascent crypto companies debt?
Why would anyone want to buy debt from a crypto startup? If anyone believes in the project, why don’t they just buy the protocol’s tokens?
For starters, you can be incredibly bullish on a project, and it could be world changing, but the market is irrational and the project could be in the red for years even if it’s growing. In the case of Amazon post the dot com bubble, it was in the red for over a decade, yet grew throughout the downturn and is arguably the most transformational company today. It was a large sum of debt that they sold before the dot com crash that saved the company from bankruptcy when it hit its lows two years after the crash.
Given the world today, there is an incredible amount of macroeconomic uncertainty. With rising interest rates and debt at all time highs, high risk assets like tech stocks and unfortunately crypto, will bear the brunt of these drawdowns. It may make sense to take a guaranteed return over a specific time period from a protocol you trust, vs taking your chances with an unpredictable and irrational market.
It’s also very bullish for a project to want to keep treasury tokens. Holding treasury tokens shows that a team is going to stick around for the long haul, and believes that the value of the project will increase with time.
To build a world changing company takes a long time. Given the inflated market conditions we live in today, markets could be in any position a year from now. Think long and hard about how you deploy your hard earned capital for maximum risk/reward alpha. Buying projects debt through Bondie just might be that answer.
Let’s build the future of Decentralized Finance and Web3!
Let’s build the future of the decentralized finance world through sustainable long term bonds!
If you’re interested in supporting the project (as we are bootstrapped thus far), please consider making a contribution below!
We plan to open source the code for every component, but all code written with the funds used from this raise will be open sourced (the first Bond DEX!)
You can also send ETH/ERC-20 here! 0x2688800836aD6476f9DE886cE879525B43693c6E