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Bond Token Redemption

Redemption is the final stage of the Bond Token lifecycle, where token holders receive their principal repayment. This stage completes the full investment journey from issuance through coupon payments to final settlement.

Overview​

Bond Tokens can be redeemed in two ways: at maturity when the underlying bond matures, or through early redemption for holders meeting the minimum settlement amount.

Maturity Redemption​

When the underlying bond reaches its maturity date, Bond Token holders can redeem their tokens for the principal amount.

Maturity Redemption Flow Diagram​

Maturity Flow

How Maturity Redemption Works​

The maturity process follows a straightforward flow from traditional finance to onchain settlement:


1. Principal Repayment
The bond issuer pays the principal amount into Bondi's regulated segregated account at maturity



2. Currency Conversion
Funds are converted from fiat currency to stablecoins



3. Onchain Transfer
Stablecoins are transferred to the Redemption Contract, making it available for token holders



4. Token Burn and Redemption
Holders burn their Bond Tokens to redeem principal


Maturity Redemption Features​

• Automatic Processing: No manual approval required — burn and redeem instantly
• Pro-Rata Distribution: Each token redeems for its proportional share of principal
• Permissionless: Any holder can redeem without KYC at maturity
• Onchain Verification: All principal movements are transparently recorded onchain

Early Redemption​

Bond Token holders can request early redemption before the bond's maturity date if they hold at least the minimum settlement amount. This requires proportional liquidation of the underlying bond position.

Early Redemption Flow Diagram​

Early Redemption Flow

How Early Redemption Works​

Early redemption is a coordinated process between onchain token transfer and offchain execution:


1. Redemption Request
Holder submits an early redemption request through the platform, confirming they meet the minimum settlement amount requirement



2. Token Transfer
Holder transfers their Bond Tokens to a Bondi-specified address where they will be burned



3. Proportional Liquidation
Bondi's regulated brokerage sells the corresponding portion of underlying bonds at best executable price



4. Currency Conversion
Proceeds (clean price + accrued interest) are converted to stablecoins



5. Settlement
Stablecoins are transferred to the holder's wallet, completing the redemption process


Early Redemption Terms​

• Minimum Amount: Holdings must equal or exceed the minimum settlement amount of the underlying bond
• Token Transfer: Tokens must be transferred to Bondi's specified burn address to initiate the process
• Market Risk: Redemption price reflects current market conditions and may differ from par value
• Processing Time: Typically 2-5 business days depending on bond liquidity