29 February, 2024

Eth Adopts D/Bond’s Erc-3475, Defi Bond Issuance Simplified

2 years ago

12 Dec, 2023

Recently, the Ethereum Foundation announced that D/Bond would be implementing the ERC-3475 standard. This adoption would allow Ethereum to expand its ecosystem and architecture.

Ethereum has finalized the standard and is prepared to deliver it to EF professionals and DeFi & Web 3.0 aficionados after extensive deliberation and evaluation of the proposal. As a result, EIP-3475 is now a recognized Application Programming Interface (API) standard that enables the issuance of bonds with different redemption data. As such, it’s now dubbed ERC-3475.

An upgrade for ERC-20

ERC-20 is the most fundamental token standard. However,  the most popular token standard has various limitations and hence isn’t an ideal solution when it comes to issuing bonds. They represent a single entity. Furthermore, they also need separate token contracts set up for every token type.

Furthermore, similar to stocks, bonds can be broken down into subsets. For example, Olympus DAO is a fixed-rate basis bond, while Société Générale is a guarantee for loan bond.

As such, bond issuance for DeFi initiatives has been quite complicated due to the lack of compatibility between the various bond classes and the existing token standards. In addition, it became extremely difficult to issue bonds using liquidity tokens such as ERC-20.

This is why DeFi projects rarely include a guaranteed rate of return. On the other hand, new in-built features of ERC-3475 help users mitigate gas fees. In contrast to ERC-20, ERC-3475 takes advantage of the multi-layer pool, which enables a larger LP to generate a large number of pairs.

ERC-3475 also eliminates the need to issue new contracts whenever a new LP pair is introduced, making it resistant to common issues such as impermanent loss. This is because each bond stores all relevant data, such as its supply and type. Therefore, the new standard developed by D/Bond facilitates less complicated LP management.

Since there aren’t any other ways to invest in bonds, D/Bond will make it possible to trade, invest, lend, and borrow bonds without having to deal with a middleman like a big bank or any other centralized institution.



By using this site, you agree to the Privacy Policy and Terms of Use.