Porter Finance partners with Ribbon Finance to bring credit to DAOs
Porter Finance is collaborating with Ribbon Finance! With this partnership, DAOs will be able to sell Porter simple bonds, backed by Ribbon option vault LP shares. This will result in lower borrowing costs for DAOs and reduced risk for lenders.
One of Ribbon’s product offerings is call option selling vaults for treasuries. These allow a DAO to place their tokens into a vault and sell call options to generate yield. When depositing in an option vault, DAOs receive LP shares. A Porter simple bond backed with Ribbon LP shares as collateral is functionally similar to Porter convertible bonds, but the option premiums are being sold to market makers.
Without this integration, DAOs could only reduce their borrowing costs by selling calls if there were investors who wanted the fixed returns of bonds and the upside potential of calls. With this integration, DAOs will be able to sell Porter simple bonds to fixed income investors while selling call options to market makers. This will result in reduced borrowing costs for the DAO and reduced risk for the lenders. This strategy is less effective with Ribbon’s current implementation of cash-settled options. We will be working together to create non-cash-settled options, resulting in lower risk for DAOs using the Ribbon options vaults.
About Ribbon Finance
Ribbon Finance is a protocol that helps users access crypto structured products for DeFi. It combines options, futures, and fixed income to improve a portfolio’s risk-return profile.
About Porter Finance
Porter Finance is building an on-chain credit marketplace for DAOs to borrow at fixed rates with no liquidation risk. Using their project tokens and social capital as collateral, DAOs can mint zero-coupon bonds and sell them to fixed income investors. This provides a liquidation-free loan to DAOs while generating sustainable yield for lenders.
If your DAO is interested in raising funds without selling tokens and without liquidation risk, get in touch with us through this borrower form. If you’re interested in providing liquidity for bond issuances, please fill out this lender form.
