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 below, KYC revocation and blacklisting).

Proceeds flows require KYC: Receiving stablecoins (coupons, principal, and call proceeds) and redeeming Coupon Tokens or Principal Tokens require KYC. Eligible recipients of stablecoins are KYC-verified wallets and registered Bondi vaults (Reinvestment Vault and Redemption Vault). The compliance check for vault depositors occurs at the vault's own exit points. 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 without KYC keeps their Bond Tokens and receives every payout as claim tokens at the time it happens. See Coupon and Principal Tokens.

Where the line sits: Bondi's compliance perimeter is the moment a stablecoin is paid out (every coupon, call and principal payout, and redemption of Coupon or Principal Tokens), 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 before maturity; it is never paid stablecoin directly; it receives claim tokens that only a verified holder can redeem.

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 Bond Token in the same transaction by default, 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 KYC-registry record. Revocation clears the eligibility flag and blocks stablecoin payouts; 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. Claim tokens follow the Bond Token's blacklist: a blacklisted address still receives them when a payout happens, but cannot transfer or redeem them. Revocation stops redemption of claim tokens, because redeeming them requires KYC.

This model maintains the regulatory standards required for traditional bond market participation while enabling permissionless secondary market activity and DeFi integration via vault products.