SECURED FINANCE DEEP DIVE SERIES

Listing and Delisting Procedure

Navigating the Lifecycle of Financial Instruments in DeFi

Kenji Mitsusada

Published in

Secured Finance

4 min readNov 2, 2023

Introduction

In the dynamic landscape of decentralized finance (DeFi), Secured Finance emerges as a distinctive force in the long-term capital markets. Far from being a conventional pool protocol, we operate as an OTC orderbook-based bond trading platform. Our mission is to democratize finance, leveraging the power of Distributed Ledger Technology (DLT). This chapter of the Secured Finance Deep Dive Series explores the nuanced procedures of listing and delisting currencies within our Zero-Coupon (ZC) bond market.

Listing New Currencies: The Itayose Process

The introduction of a new currency marks an exhilarating event in our timeline. It heralds the expansion of our ZC bond market, broadening our portfolio of financial instruments. Our listing strategy is crafted for clarity and precision, reflecting our foundational values and our dedication to democratizing finance.

The Procedure

Pre-Open Period:
Prior to the formal listing, we engage in a Pre-Open Period spanning 168 hours (7 days). In this phase, users are encouraged to place orders in the dormant orderbook. This preparatory stage is crucial for assessing the market’s interest and the forthcoming currency’s liquidity potential.
Opening the Orderbooks:
Subsequent to the Pre-Open Period, we inaugurate 4 active orderbooks for the new currency. These are structured to reach maturity quarterly, coinciding with the final Fridays of March, June, September, and December, thus harmonizing with the BTC futures listings.
Expanding the Orderbooks:
Commencing with the initial quartet of orderbooks, we systematically introduce an additional orderbook each week until we reach a total of 8, encapsulating a 2-year tenor. This methodical expansion serves several key objectives:
Liquidity Management: It ensures the market gracefully assimilates the new currency, avoiding any abrupt liquidity fluctuations.B) User Adaptation: It affords market participants ample time to acclimate to the new market dynamics and opportunities.

After 5 weeks, the market attains equilibrium with 8 active orderbooks, providing a diversified array of trading options for short-term and medium-term fixed income.

This phased methodology is designed to avert liquidity disruptions and aligns with the Global Itayose method, also applied during our mainnet launches. For an in-depth exploration of the Global Itayose process, further information is available here.

The Delisting Procedure: Orchestrating an Organic Expiry

The delisting of a currency is a testament to the intricate and sophisticated nature of our OTC orderbook-based system. Our approach is methodical, taking into account the ongoing trading activities and safeguarding the interests of our stakeholders.

Here’s the detailed delisting procedure:

Disabling Auto-Roll:
As the initial step, we deactivate the auto-roll feature for the targeted currency, signaling the onset of the delisting phase and precluding the automatic renewal of positions. Please find more details for Auto-Roll in our official documentation.
Natural Expiry and Repayment Window:
Post auto-roll deactivation, the currency’s market is permitted to follow its natural course to expiration. Participants are provided a one-week window following maturity to settle their dues. This interval is pivotal, ensuring orderly position settlements. Non-compliance within this window triggers liquidation by an appointed liquidator, incurring a penalty rate of 7%.
Redemption Period:
The one-week repayment window’s conclusion allows lenders to reclaim their funds, marking the final act of the delisting process.

It is crucial to note that the currency in question remains tradable throughout the two-year cycle, up to its final expiration. This grants users the flexibility to manage and liquidate their investments as needed. The option to unwind positions via the ZC bond market is consistently available until the orderbooks’ ultimate expiry.

Conclusion

Our listing and delisting protocols are meticulously structured to resonate with our vision and the distinctive attributes of our platform. These listing and delisting processes are engineered to foster transparency, minimize liquidity disruptions, and ensure a fluid user experience. As we advance and innovate, our commitment to delivering a decentralized solution to the DeFi sector’s challenges remains unwavering, as delineated in our White Paper.

We extend an invitation to all who share in our aspiration to democratize finance to accompany us on this transformative journey.

About Secured Finance

Secured Finance is revolutionizing the digital asset landscape by constructing interbank-grade capital markets. Our innovative protocol is designed to offer a secure, flexible, and scalable fixed-income solution for digital assets. Comprised of a team of expert investment bankers, we are committed to integrating traditional finance wisdom into the realm of cryptocurrency and digital assets.

Stay informed and connected with us for further information and updates.