Bond Tokens
Bond Tokens are ERC-20 tokens backed 1:1 by corporate bonds purchased in traditional markets. They combine the stability and returns of traditional bonds with blockchain composability and accessibility.
Corporate bonds typically require minimum investments over $200,000, excluding most retail investors. Bond Tokens solve this through fractionalization: each token represents a $100 face value with 18 decimal places for precise trading, making corporate bond exposure accessible to everyone.
Token Architecture
Bond Tokens achieve a balance between regulatory compliance and DeFi composability:
Full Fungibility:
• ERC-20 compatibility enables permissionless DEX trading and secondary market activity: no KYC required to buy, sell, or transfer
• Snapshot-based coupon (interest) payments ensure fungibility: coupon entitlements do not follow the token on transfer
• For lending, borrowing, collateral use, and auto-compounding, the Reinvestment Vault (vbtXXX) wraps Bond Tokens into a fully composable ERC-4626 token that integrates with any DeFi protocol
Technical Features:
• Transfer Resistance: Historical coupon entitlements immune to gaming
• Verifiable Distributions: Every proceeds flow — coupons, incentives, issuer calls, and maturity principal — is enforced onchain and auditable. Coupons and incentives use Merkle proofs over fixed snapshot entitlements and are cryptographically verifiable; calls and principal register net liabilities onchain, settle pro-rata with explicit solvency bounds, and never burn Bond Tokens without paying or recording the matching stablecoin.
• 18 Decimal Precision: Enables precise fractional ownership
Token Naming Conventions
Each Bond Token corresponds to a specific bond issue, following the naming convention btXXX, where XXX represents the first word of the issuer's name. This ensures clear identification across the platform and DeFi ecosystem:
Examples:
• A bond from Alpha Corporation → btALPHA
• A bond from Beta Enterprises → btBETA
• A bond from Gamma Holdings → btGAMMA
Vault Bond Tokens: Reinvestment Vault shares derived from a Bond Token follow the convention vbtXXX — for example, vbtALPHA for the vault share built on btALPHA. See Reinvestment Vault.
DeFi Composability
Bond Tokens trade permissionlessly on DEXs; buying, selling, and providing liquidity require no KYC. For complete details on secondary market trading, see Secondary Market.
For DeFi composability beyond trading — lending, borrowing, collateralized positions, and auto-compounding yield strategies — Bondi's Reinvestment Vault (a customized ERC-4626 vault with all the standard interface) wraps Bond Tokens into a Vault Bond Token (vbtXXX) that integrates with any protocol accepting ERC-20 assets. Entry and transfer are permissionless; the vault never pays distribution stable to a non KYC-verified wallet, but all holders can always exit in Bond Token form. Vault Bond Tokens can never be frozen or force-transferred. See Compliance at Reinvestment Vault Exit. vbtXXX can be used as collateral in Morpho markets to enable leveraged looping on Bond Token exposure.
Tokenomics and Distribution
Supply Mechanics
Bond Token supply is determined from the net capital raised (after platform fees are deducted at extraction) and the bond's dirty purchase price:
Total Supply = Net Capital Raised ÷ Dirty PriceWhere Net Capital Raised = Total Capital Raised − Platform Fees and Dirty Price = Clean Price + Accrued Interest. The dirty price reflects the accrued interest paid at the time of purchase, ensuring economic equivalence between traditional bond ownership and the tokenized representation.
Supply is tracked with 18-decimal precision. All token math uses OpenZeppelin's Math.mulDiv. A single Bond Token (one bond series, one maturity date) can be issued across multiple funding rounds with each round emitting additional supply at its own dirty price.
For a worked distribution example with decimals and exchange-rate math, see the FpUSD Real‑World Example.
Bond Token Lifecycle
Bond Tokens progress through a complete lifecycle from creation to redemption:
Lifecycle Stages:
• Issuance: Primary market funding where Bond Tokens are created through KYC-verified investment
• Trading: Permissionless secondary market trading on DEXs
• Coupon Distribution: Automated periodic interest payments to token holders via snapshot-based entitlements
• Redemption: Final principal repayment at maturity, issuer bond call, or early exit via the Redemption Vault
Vault Products:
• Reinvestment Vault (vbtXXX): Auto-compounding ERC-4626 wrapper that enables full DeFi composability — lending, borrowing, collateral, leveraged looping
• Redemption Vault: Batch-based early exit path to access off-chain liquidity when onchain liquidity conditions are unfavorable
For complete details, explore each lifecycle stage and vault product using the links above.
Compliance Model
Bond Tokens balance regulatory compliance with DeFi innovation through a hybrid approach:
Trading is permissionless: Buying and selling Bond Tokens on DEXs and transferring them between wallets do not require KYC. There is no KYC-based transfer restriction on Bond Tokens except blacklisted addresses. (See KYC revocation and blacklisting).
Proceeds flows require KYC: Claiming coupons, redeeming principal, and receiving call settlement proceeds all require the recipient wallet to have valid KYC. Whitelisted Bondi vaults (Reinvestment Vault and Redemption Vault) are treated as eligible recipients at the distribution layer — the compliance check for vault depositors occurs at the vault's own exit points. The Admin Safe is also an eligible recipient, for the limited purpose of claiming coupons on Bond Tokens it holds in compliance custody (relocated from KYC-revoked addresses under compliance policy). Wallet-held Bond Token relocation via complianceBurn is invoked only when explicitly mandated by the regulator — KYC revocation alone does not trigger it. A holder whose KYC is revoked but who is not subject to such action retains their Bond Tokens and onchain entitlements and remains blocked from claiming until KYC is restored, after which regular claim paths apply.
Where the line sits: Bondi's compliance perimeter is the moment value flows from Bondi to a wallet — issuance/minting, and every coupon, principal, and call payout — never the holding or transfer of tokens. A wallet that is not KYC-verified can always hold Bond Tokens and vault shares, trade them peer-to-peer, and exit its position in Bond Token form; it is simply never paid a bond's stablecoin proceeds until it completes KYC.
KYC revocation and Bond Token blacklisting: These are two separate onchain checks: KYC eligibility on the registry and blacklist status on the Bond Token. Every KYC revocation also blacklists the holder on every attached Bond Token, atomically in the same transaction — but blacklisting alone does not imply the address was ever KYC-registered or revoked; a holder can be blacklisted on the Bond Token without a registry record (for example, a permissionless secondary-market acquirer). Revocation clears the eligibility flag and blocks proceeds claims; blacklisting blocks Bond Token transfers and is required before onchain compliance actions such as emission-round relocation, complianceBurn (when explicitly mandated), or Redemption Vault force-close.
This model maintains the regulatory standards required for traditional bond market participation while enabling permissionless secondary market activity and DeFi integration via vault products.
Features
Bond Tokens bridge traditional bond markets with onchain infrastructure and DeFi:
Fractional Ownership: Each Bond Token represents $100 face value with 18-decimal precision. Corporate bonds that previously required minimum investments of $200,000+ are now accessible at any position size.
Snapshot-Based Coupon Entitlements: Coupon payments are distributed based on a holder's Bond Token balance at a specific snapshot block, not at transfer time. This design ensures fungibility — Bond Tokens can be freely traded without losing past coupon entitlements or gaining entitlements that belong to prior holders.
Issuer Call Rights: When bond issuers exercise their right to buy back part or all of the issue before maturity, callable supply is redeemed pro-rata across all holders. registerCall triggers a full Bond Token freeze — no onchain Bond Token action is permitted until the relayer has processed every holder in the registration-block snapshot, including transfers, DEX trades, vault deposits, mints, and even regulator-mandated complianceBurn; the only allowed burns are call-settlement passes via executeCallForUser. Bondi runs that relayer pass immediately; the freeze typically lasts only minutes, then normal transferability resumes automatically. For KYC-eligible wallets and whitelisted Bondi vaults, callable Bond Tokens are burned and stablecoins paid in the same transaction; if a wallet lacks valid KYC at execution, its Bond Tokens are still burned but the stablecoin entitlement is recorded onchain for later self-claim. See Issuer Bond Calls for the full flow.
Onchain Document Management (ERC-1643): All bond purchases are permanently recorded onchain with content hashes and timestamps, ensuring transparent, auditable access to the complete bond lifecycle history. See Proof of Reserve & Deployed Addresses.
Minimal Admin Privilege Surface: There is no admin force-transfer capability. Pause acts as a global stop for all Bond Token movements. Compliance actions on a holder's balance are supply-neutral: the COMPLIANCE_BURNER_ROLE path (Admin Safe) burns Bond Tokens from a blacklisted address (see KYC revocation and blacklisting) and re-mints the identical amount to the Admin Safe in the same transaction, so total supply is unchanged — the tokens are relocated into Admin custody and never destroyed. This path works under admin pause but not during an active issuer bond call. Total supply is only ever reduced through Distribution-controlled burns during principal redemption or issuer bond calls — where, for KYC-eligible holders and whitelisted Bondi vaults, the burn and the stablecoin payout always occur in the same transaction; if a wallet lacks valid KYC at execution time, its Bond Tokens are still burned at settlement but the stablecoin amount is recorded as onchain entitlement and can be claimed once KYC is restored.