Telos, one of the most active blockchain platforms in the world, has announced
the launch of a Decentralized Finance (DeFi
) tool, T-Bond NFTs. T-Bonds are transferrable non-fungible tokens (NFTs
) that will allow crypto projects to sell locked tokens until the maturity date or other conditions are met. T-Bond NFTs can be traded or sold as a yield hedge for tokens that offer staking rewards or on secondary markets for investment, similar to U.S. Treasury Bonds.
Currently, projects typically sell their token at a discounted rate to fund the development to pre-determined milestone, such as a mainnet launch. As companies make these tokens available through exchanges, prior buyers can immediately capitalize on their discounted price by selling their tokens immediately. This is a common challenge as it diminishes the goal of the original token sale.
By introducing T-Bond NFTs, the problem is resolved by allowing cryptocurrency projects to sell tokens that are locked in an NFT until the maturity conditions are met. If liquidity is required prior to the maturity condition being met, they are now able to sell their NFT on any supported secondary market.
T-Bonds have a three-period life cycle: creation, hold/trade and maturity. T-Bond NFTs are not officially a bond, as a T-Bond transfers ownership of the underlying token when the NFT is sold, so unlike a bond, there is never a debt created.
The valuation of a T-Bond NFT is a function of its face value related to the expected time to reach maturity, relative to alternative forms of yield. With tokens that offer staking rewards, an opportunity is created for hedging or speculating on yields, allowing T-Bond NFTs to form a new class of DeFi derivatives.