Arbor Finance — Bonds 4 DAOs
We are excited to announce the launch of Arbor Finance! Arbor is building the way for DAOs to access on-chain debt financing.
Arbor allows DAOs to raise money by borrowing against their native tokens with no liquidations and at fixed interest rates through tokenized DeFi bonds. This is an attractive alternative to selling tokens to raise money and gives DAOs additional options to grow. Lenders receive high fixed yields by lending to these DAOs.
Selling equity-equivalent governance tokens is the main strategy DAOs currently use to raise capital. This is great to initially fund development, but using token sales as the only fundraising mechanism comes with numerous downsides and results in an inefficient capital structure that stunts the growth of DAOs. Providing DAOs the ability to access debt based financing is vital for unlocking the full potential of the DAO.
Our team originates from the Porter Finance team where we facilitated the very first DAO bond offering with Ribbon Finance. Ribbon was able to raise 3m USDC without selling any tokens. You can see more about the RBN convertible bond in our app.
We are starting with a fork of the Porter Finance smart contracts that have been audited by Zellic and Spearbit.
Today we are opening applications for new borrowers. If issuing bonds could be a good fit for your DAO please dm us on twitter. If you are interested in becoming a lender, join our discord and follow our Twitter to stay up to date on bond issuances. For more information about Arbor checkout our website and documentation.
FAQ
Q — Why did Porter shut down and why did you launch Arbor?
Porter Finance was shutdown by the founder. Three out of the four team members at Porter still feel that the potential for on-chain bond issuances is a massive market. The potential for high APY for lenders and non-dilutive funding for DAOs is far too big of an opportunity to ignore. We therefore decided to build Arbor Finance with a fork of Porter’s code.
Q — Why would DAOs want to issue bonds?
Bonds allow DAOs to borrow funds at fixed interest rates without the fear of liquidation by using their native tokens, which make up the majority of their treasuries. Borrowers using collateralized debt positions on other protocols must maintain a particular collateral ratio or risk being liquidated.
If the protocol is expected to grow, a DAO might be better off delaying the sale of its project tokens, borrowing now, and selling fewer tokens at a higher price later. Or, even better, using increased protocol revenue from the growth funded by debt to pay off said debt and never having to sell governance tokens.
Q — Why would lenders lend to DAOs? What’s the expected APY?
Lending to DAOs is a sustainable way to earn high yield at a fixed interest rate. We expect lenders to earn 10–20% APY on bonds issued through Arbor.
Q — How do I become a lender?
Join our discord and follow us on twitter to be notified for our next bond issuance
Q — Are your smart contracts audited?
We have undergone intensive internal audits, cross-protocol audits, and formal audits with zellic & spearbit.
Links
Twitter: https://twitter.com/arborfinance
Landing: https://arbor.garden
Docs: https://docs.arbor.garden
Discord: https://discord.gg/facdBD3ZtA
