Author Topic: Idea for a Smartbond system  (Read 1088 times)

0 Members and 1 Guest are viewing this topic.

Offline Pheonike

One of challenges for the creation of Smartcoins is the high collateral cost associated with their creation. I think we can built a bond market by allowing user to loan out collateral to users who want to borrow. The SmartBonds will be a fixed size and duration. When a user borrowers an asset, the asset created based on the feed price rate. The borrower does not receive the actual asset. The asset is created and goes into a liquidity pool used by the system . The borrower is in essence making bet on rather the asset will increase or decrease. The total amount of assets can be no more than half the value of the the reserve pool.

SmartBond30    25,000 BTS
SmartBond120  50,000 BTS
SmartBond365  1000,000 BTS

Borrowers will put 115% of the collateral and the bond puts ups 100%. This means the newly created Smartcoin is back by 215% collateral. The loan term is fixed at the start. The borrower can pick a term duration up to 15 days. The borrower can however add collateral during the term of the loan. If the borrowed asset’s value increases and the collateral for the loan drops below 140% the borrower will get low collateral warning. If the collateral reaches 115% the loan is closed and borrower loses the rest of their collateral. If the asset’s value decreases, then borrower gets 100% of his collateral back plus the difference in value from the start. Daily interest payments are made from the collateral. The system determines the percentage interest for the loan by measuring the supply vs demand.  The interest rate is fixed during the course of the loan

At the end of the SmartBond term, the buyer of the bond receives their collateral back plus the interest gained.
« Last Edit: March 07, 2016, 09:54:03 pm by Pheonike »