Announcing the 3rd Initial Bond Voucher Offering with Solv Protocol — $CAKE Bond
iZUMi Finance will hold its third Bond Voucher sale via Solv Protocol on Aug 17, 2022, partnering with Cobo Safe. This round’s sale is valued at $1M in $CAKE to support the liquidity on iZiSwap.
What is Bond Voucher?
Bond Voucher, powered by Solv Protocol, is the first on-chain bond product. Designed as a zero-coupon bond with an embedded Euro-style call option that allows DAOs to borrow at low costs with no liquidation risk, the Bond Voucher has enabled projects such as Perpetual Protocol, Unslashed Finance, Strips Finance, and iZUMi Finance to raise over $24M for treasury diversification or general financing purposes since its launch in February 2022.
In order to incentivize purchasing, iZUMi Finance introduces bond farming, which is a structured method of liquidity mining, providing risk-free earnings to bondholders.
The bond is issued by iZUMi Finance and backed by iZUMi platform’s on-chain liquidity revenue, and by participating in bond farming, bondholders will enjoy high return at a low risk.
Details of the 3rd Round of Bond Voucher Offering
Use of Fund
The fund raised via CAKE Bond Voucher will be used to provide liquidity on iZiSwap. iZiSwap is the first decentralized exchange (or DEX) that adopts Discretized-liquidity AMM model, or DLAMM, which significantly enhances capital efficiency by allowing the liquidity to be deployed in every price tick and reducing slippage when swapping tokens.The income generated from the liquidity provision will first be used to repay the investors of the Bond Voucher and then reward the market makers.
The exact amount and currency in which the CAKE Bond Voucher repays the investors at maturity is subject to IZI token’s 7-day average price before the maturity date.
If an IZI token trades at less than 0.015 CAKE, the investor is repaid the principal and accrued interest. An IZI token trading at more than 0.015 CAKE will exercise the embedded call option, converting the Bond Voucher into an amount of IZI tokens as indicated in the table below.
Why Bond Farming?
- For bondholders, Bond Farming enables higher profit (2~4 X compared to normal farming APR), and gives the opportunity to have the risk exposure to two tokens (bond & call option), while still keeping low risks.
- For protocols (For example, a DEX), bond farming with iZUMi Finance could help them attract better on-chain liquidity on DEXs, with higher efficiency of liquidity incentives, which is vital to the survival in a bear market. It’s a win-win situation for both the liquidity providers and the protocols if they adopt Bond Farming on iZUMi.
- The funds raised through Bond Vouchers will be stored in the multi-sig wallet co-managed by Solv, iZUMi, and Cobo. The wallet will then be used to add liquidity to the iZiSwap pool vault on iZUMi. At maturity, the fund will also be claimed through this wallet to maintain transparency for the use of the raised fund.
- iZUMi will collateralize 2.13 million USD worth of iUSD tokens (over collateralized).
- iZUMi will use the Treasury wallet to sign the Repayment Statement via EthSign. At maturity, iZUMi promises to repay the principal and the interest.
- iZUMi’s smart contract has been audited by Certik and Blocksec
Previous Bond Voucher Sales & Successful Repayments
By far, iZUMi Finance has held a total of two rounds of Bond Voucher sales via Solv Protocol, with all rounds having been successfully repaid with principal and interest. In the first round of Bond Voucher sales, 3M BUSD worth of Bond Voucher was sold out in 17 minutes, with another 5k WBNB worth being sold out in under two hours.
During the second round, WETH and BIT bond holders enjoyed 8% and 18% APR respectively, in which there was a much higher APR than that of any similar products but at low risk. Recap of past rounds is listed below.
Rules for Bond Redemption
When the maturity period ends, if the market price of iZi is above 0.015 CAKE, the bond will be automatically converted to iZi tokens to maximize bondholders’ profit (in USD). If bondholders did not wish to exercise the option, they may return the bond NFT to iZUMi’s wallet address within 48 hours of the end date and be returned with their principal and accrued profit in $CAKE token.
iZUMi’s official wallet address (BEP20): 0x4D9EB5BE0aE58D5a6c32A816702d89af8AE7a096
About iZUMi Finance & iZiSwap
iZUMi Finance is a multi-chain DeFi protocol providing One-Stop Liquidity as a Service (LaaS).
Currently, iZUMi Finance presents two major liquidity services: LiquidBox and iZiSwap. LiquidBox is iZUMi Finance’s programmable liquidity mining protocol based on Uniswap V3, providing a non-custodial solution for liquidity mining. iZiSwap is the first Decentralized Exchange (DEX) based on the DLAMM (Discretized-Liquidity-AMM) model, aiming to maximize capital efficiency.
The ultimate goal for iZUMi Finance is to provide continuous and efficient on-chain liquidity for various tokens. It has provided liquidity services to 10+ protocols including BitDAO, and has managed more than $60 million in liquidity assets for well-known institutions and more than 8,000 liquidity providers. Currently, iZUMi Finance has deployed its protocols on four blockchains, Ethereum, Polygon, Arbitrum, and BNB Chain. Investors include Bybit, Mirana, IOSG, Hashkey Capital, Fenbushi Capital and other top-tier institutions.
About Solv Protocol
Solv Protocol is a decentralized marketplace for minting, trading and managing NFTs that represent financial rights. Solv has offered Vesting Voucher, an allocation management fundraising tool, Convertible Voucher, a structured product allowing DAOs to leverage native tokens, and Bond Voucher, the first market-tested debt instrument in DeFi that helps DAOs tap into the debt capital markets.
About Cobo Safe
Cobo Safe is DaaS (DeFi-as-a-Service) in the smart contract based environment, powered by Gnosis Safe.
It solves the limitations of existing multi-signature wallets by letting teams collaborate in accessing DeFi protocols without sacrificing efficiency for security. The focus is on role delegation and risk management through limiting operator’s access to protocols, actions and even controlling the parameters to granular trading pairs and limits. This risk-mitigated team collaboration supports custom workflows and creates a more efficient multi-signature access to DeFi where asset owners can give pre-defined operational controls to their team in a trust-less environment.