Porter Finance has a new idea to help Daos grow: Defi Bonds

Porter Finance has a new idea to help Daos grow: Defi Bonds

If a DAO wants to get money for the company with a treasure trove full of token, its main option is currently to sell tokens either through private sales or on the secondary market. Porter Finance plans to provide this DAOS (decentralized autonomous organizations) a new strategic instrument that is more like the emission of corporate bonds.

The platform will enable DAOS to borrow stable coins into fixed interest rates, whereby the tokens of your project is used as security without the risk of liquidation. This is practically a zero cup bond that is sold to investors who are looking for a fixed income, Jordan Meyer, founder of Porter Finance, told Blockworks.

"So far nobody has developed a DAO-friendly solution for borrowing," said Meyer.

The platform will enable DAOS to store collateral from your treasury, to create a "defi bond" offer with a discount for investors and then to have the loan back on the due date with interest defined by the market.

"We leave the DAOS the choice of how you want to structure [The Offering]. The DAO can put the offer on the registration list and only allow KYC-certified or accredited investors or, if you want, make a public offer-it is up to you," added Meyer.

The frontend of the platform will initially be designed in such a way that users from the USA or sanctioned countries are excluded due to regulatory uncertainties.

There are some important differences to bonds in traditional financing, namely the risk profile. Bonds issued by DAO will not be a priority in any corporate capital stack. Instead, they are secured by the collateral in the Smart Contracts from Porter Finance.

The lenders take on a certain directional price risk of the underlying security of the security, but in return receive an option bonus set by the market at the time of the offer.

"This option premium - and this discount - is set during the auction. Market participants who offer decide how high the implicit volatility is, how the option is to be assessed, essentially the market risk that they enter into," explained Meyer.

For the DAO loan, the system offers a mechanism to finance the operating capital for the operation without pressing the price of its treasury token down, losing governance rights or risking liquidation in a money market fund like Rari Capital Security pools -Now part of the tribe dao.

a random ascent

Meyer concretized the idea for Porter Finance when climbing the Kilimanjaro in Tanzania in September 2021.

"You have 15 pounds on your back, but there are other people who help you who are called ... You would never make it up the mountain on this 7-day hike if you didn't have the wearers to wear them bags for them or to get you up-and that was really impressive for me," recalls Meyer, who named the protocol after this hardworking helper.

Porter finance

"We want to be able to enable Daos to achieve their highlights, their peaks and their financial goals."

The original logo of the platform was a green backpack that was unfortunately confused with a robot, said Meyer. Since then, his branding has been revised in the Ethereum-Minnet according to Smart-Contract-Audits from Secureum and Speerspitze .

"We will go where the Dao treasure chambers are, and at the moment the Ethereum is," said Meyer.

a "huge market"

Porter Finance has a seed round of $ 5 million with investments by Parafi Capital, Dragonfly Capital, Nascent Ventures, Buckley Ventures, Robert Leshner, Kain Ward, Tyler Ward, Joey Santoro and Sam Kazemian.

The co -founder of Nascent, Dan Elitzer, told Blockworks that he had taken the chance to support Porter after discussing a similar concept with Ben Forman, the founder and managing partner of Parafi.

"Corporate debts are simply an absolutely huge market. And companies that have liquidity needs do not just start and sell more shares ... A debt -based financing is simply much more sensible - effectively cheaper capital," said Elitzer.

"This is an important additional tool that Daos should have in your toolbox," he said.

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The contribution Porter Finance has a new idea to help Daos grow: "Defi Bonds" is not a financial advice.