Trade Arbor bonds in an orderbook: Our secondary market is here
Arbor bonds provide an excellent opportunity to earn a high fixed yield on stablecoins by lending them to DAOs. However, like any investment product, Arbor bonds are exposed to the investment trilemma; investors must compromise between liquidity, returns, and safety.
Currently, Arbor emphasizes high, safe (i.e. predictable) returns. Using an auction mechanism in conjunction with the zero-coupon bond structure, Arbor ensures investors can identify and participate in bond auctions with higher yields (e.g. 20.8% yield-to-maturity (YTM) at the most recent Shapeshift Convertible Bond auction) and safer, predictable returns on their investment. This latter component is supported through Arbor applying extensive due diligence in collaboration with external third-parties, such as Credora, to minimize the possibility of a borrower defaulting on their loan. Further, the high yield additionally compensates for the underlying risk of a borrower default.
Arbor has thus intentionally emphasized the safety and returns aspects of the investment trilemma. However, this structure creates illiquidity of the bonds. Until today, investors have only been able to redeem their bonds at maturity, at which time they sell them back to the borrower for $1 (for further information about this process, check out Arbor’s Documentation). . This means lenders’ capital is locked for the duration of the bonding period.
Our secondary marketplace is here to change that.
With the launch of our orderbook, we create a secondary market for Arbor bonds. This seeks to eradicate the investment trilemma as Arbor can now provide safe, high fixed returns without sacrificing liquidity. Our orderbook creates the opportunity for investors to buy and sell their bonds on a secondary market. This enables lenders to sell their bonds early, unlocking the underlying liquidity. Investors can also buy bonds whenever they want to earn a predictable yield on their stablecoins. The marketplace is live, so start trading bonds today!
Start buying and selling Arbor bonds here:
In our eyes, this is a fundamental improvement to the Arbor platform, which lifts Arbor bonds as an investment product to another level. Due to the volatility within the crypto markets, our orderbook provides a snapshot of the perceived underlying risks and market changes, with daily re-pricing providing an indication of great buying and selling opportunities. Since Arbor’s inception, our goal is disrupting the Web3 debt-financing space, and we seek to constantly grow our products so they meet the ever-changing needs of the DeFi community. Arbor’s goal for the orderbook is to do exactly that; moving beyond TradFi constructs and constraints to provide novel products and support to our growing community. Exciting times ahead! Leave us your feedback in our Discord.
We are Arbor Finance and help DAOs access debt financing!
If you want to earn #realyield through lending to DAOs during our bond auctions, then follow our socials to stay up to date. The next auction is just around the corner ;).
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