Here’s how a DeFi protocol handles the tech to issue digital bonds

Zug, Switzerland, December 22, 2023

As traditional finance goes through a wave of digitization thanks to blockchain technology, bonds get their share. Bonds are debt securities that symbolize loans and emerge as the preferred choice for investors seeking stable and reliable opportunities. Digital bonds, on the other hand, represent a step away from traditional methods and the adoption of innovative approaches.

Departuring from traditional paper-based processes to blockchain-based structures promises increased efficiency, transparency, and accessibility in finance. However, this transformation obligates developers to fulfill the technical prerequisites that serve as the backbone for issuing digital bonds. Adapting to cutting-edge technologies is not merely a choice for digital bond issuers but is necessary to ensure robustness and reliability. From automated smart contracts to clearing protocols, the technical infrastructure supporting digital bonds plays a pivotal role in reshaping the financial landscape for the better.

Order book-based architecture

Decentralized finance (DeFi) protocols offer myriad alternatives to traditional financial instruments and attract investors with user-friendly products. However, failure to meet essential technical requirements may undermine the advantages that make DeFi appealing. Therefore, it is imperative to carefully consider all technical prerequisites when selecting a DeFi platform to ensure a reliable investment opportunity.

An interbank-grade DeFi protocol, Secured Finance introduces a fresh perspective to lending projects within the crypto market. The protocol stands out in a landscape populated by numerous predecessors by adopting an order book-based architecture, marking a noteworthy leap in innovation. Secured Finance’s distinctive approach sets it apart and enhances its capacity to redefine and elevate the dynamics of decentralized finance.

Secured Finance departs from traditional pool-based lending models -where liquidity depends on users’ locked funds- with a groundbreaking innovation. Unlike traditional pool-based lending projects, which rely on local interest rates and may not accurately reflect overall market trends, Secured Finance’s order book-based system introduces a transparent and equitable pricing mechanism determined by market demand and supply. The order book-based approach enhances market efficiency and opens up new investment opportunities for investors.

Ensuring transparency while minimizing costs

In blockchain-based systems, a necessary component is the gas fee for each transaction to sustain the system’s operation. While gas fees differ by platform, the Ethereum network, favored by many in the DeFi space, occasionally demands high fees. Secured Finance addresses the challenges posed by Ethereum’s gas costs and processing capabilities by implementing lazy evaluation, a technique derived from computer science. The lazy evaluation enables efficient management of order books, ensuring market transparency while concurrently minimizing gas costs.

“Secured Finance has carved a unique position in the crypto market with its technological innovations and architectural features,” Secured Finance AG founder and CEO Masa Kikuchi noted, adding: “We aim to provide new benchmarks to the market and contribute to a broader financial market, including the derivatives market.”

Blockchain technology has liberated the financial world by erasing the confines of central authority. Similarly, Secured Finance extends this liberation to the digital bonds market, acting as a bridge that eliminates counterparties between lenders and borrowers. The DeFi protocol effectively augments liquidity in the secondary market by implementing a distinctive market structure that integrates an order book system and a clearing house.

Media contact name: Secured Finance Contact        


Company: Secured Finance AG        



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