An Investopedia report posted in August 2018 claimed that the world bank was looking to invest in a new class of assets in the blockchain business. The World Bank tasked Australia's Commonwealth Bank with creating the new blockchain bond for the world bank to revolutionize the investment world. The new bond is Bond-i, an acronym for 'Blockchain Offered New Debt Instrument' aiming to be the first blockchain-based bond.
Institution of Bond-i came with the world bank realizing the significant benefits of blockchain in the general financial world, especially in streamlining processes. Blockchains can enhance regulatory oversight and bolster operational efficiency, especially in the trading of investment securities like shares and the newly instituted Bond-i. This two-year bond was due in august 2020 and was able to raise 110 million USD.
Moreover, the platform plans to offer real-time updates on participants' emission and ease transacting processes. The blockchain base will help in auditing the transparent, immutable transactions to manage the operational risks. Some analysts think introducing bank-issued bonds was a world bank strategy of expanding its debt disbursement. However, a blockchain-based bond is a good idea that may bring profits to the bond givers.
The most recent platform to launch a blockchain bond is the SYNC network, which introduces a new class of crypto assets. SYNC assets investment prospects will match those of other assets like cryptocurrencies, stablecoins, and stock in both the crypto and fiat worlds.
This next-generation platform embeds the most advanced technologies in cryptography, making it the most futuristic Defi platform. It introduces a SYNC token pairing and bonding with other coins like bitcoin and ethereum, creating a more robust, dynamic crypto network.
Additionally, the sync network merges two contracts, i.e., SYNC (ERC-20) and crypto bonds ERC-721. These contracts allow the trustless token transfer and interactions between crypto bond investors. There is the trustless transfer between wallets, trustless trading via auctions, and trustless proof of long term position.
Benefits of SYNC's New Crypto Bond
Investing in bonds in the fiat world has mainly been beneficial for investors since the world bank’s inception in the 1900s. However, the introduction of SYNC bonds in cryptography brings a wide range of advantages to the bondholders, the companies, the debtors, and developing platforms. The first and foremost advantage of the SYNC network is the full automation of services.
High Interest and Yields
The platform institutes daily adjustable interest rates for any bond to match the supply-demand forces. Adjusting rates are equally beneficial to the lender and the receiver, depending on whether the rates increase or decrease. However, with adjusting interests, the market will enjoy adequate liquidity since investors will create more crypto bonds when rates are high, while more people will buy and trade current crypto bonds on the secondary market when interest rates decrease.
Cross Chain Funds Transfer
The new SYNC network will give the option of cross-blockchain transfers by the use of REN protocols. The protocols are the most common in transferring transaction values between blockchains, i.e., ethereum, bitcoin, etc. However, some platforms are still not cross-chain enabled; they hinder cross-chain transfers. SYNC networks cross-chain capability inclusion allows the easy exchange of SYNC and other coins at any time.
Ability to Personalize Portfolio
The SYNC platform is also unique since it allows investors to personalize their portfolio for maximizing yields. For instance, an investor can choose to use a 1:1 ratio for SYNC to ETH or BTC investment; however, SYNC sets a minimum of 50% rate for bonding with any token. Moreso, an investor can choose from the extensive portfolio option, i.e., ether, BTC, and many digital assets already implanted in the platform.
SYNC network erases tokens used to create SYNC crypto bonds from the total supply until the bonds' maturation period. Erasing the tokens ensures the token's long-term sustainability and outstanding performance in terms of liquidity. Moreover, this new interest-earning technique helping to bolster the token's demand, thus high liquidity.
The Network's community involvement is quite exemplary in this platform, especially using their telegram channel. SYNC community can participate in idea generation and moderation of the forum by sending an application to their email address.
Additional SYNC Network’s Achievements
SYNC Network looks to gain trust from different potential partnerships in the DeFi industry. A recent announcement revealed xBTC’s decision to lock $100,000 of their Uniswap liquidity into SYNC’s Crypto Bonds. In turn, SYNC added $100,000 in SYNC tokens to seal the Crypto Bond creation; xBTC cannot revert their liquidity since the Crypto Bond creation.
Considering SYNC’s bonds with the ERC-20 tokens, xBTC will benefit from the Crypto Bond period. Furthermore, it ramps up the security of investors’ tokens, preventing additional risks of losses. The partnership will push the visions of both companies within the DeFi industry. xBTC is taking a step further into collateralizing its synthetic derivative structure using real tokens across several liquidity pools.
Another advancement for SYNC network is the soon-to-come announcement of their appointed public advisor. The advisor will be a great addition to ensure the community understands more about Crypto Bonds and the roles they play for investors.
Although the SYNC network is not the first platform to generate the blockchain bond idea, it perfects the concept by protecting against similar pre existing systems' flaws. For instance, this platform issues a token for investors and allows for the bond access without auction options. Additionally, unlike any other bond, this Network's interest rate provision is adjustable, depending on the market's demand and supply forces.
SYNC brings a wide range of benefits in interest, from the bonds to other parties and transaction charges. This Network allows for cross-chain fund transfer by leveraging REN protocols; therefore, users get crypto from other blockchains like ethereum and bitcoin.
Investors also gain the advantage of customized portfolios for more lucrative returns and best liquidities. The introduction of crypto bonds into the globe magnify the chances of maximizing returns and mitigating risks.