ForTube Bond
1. Submit basic information about the bonds;
2. Deposit the corresponding amount of collaterals;
3. Wait for the credit rating of the bonds, if the rating is passed, the bonds enter the issuance and sale stage; if the rating is not passed, the collaterals can be retrieved;
4. Interest will start immediately after the completion of the sale of the bonds, if the fund-raising fails, the collaterals can be retrieved;
5. The issuer needs to pay off the debt in full before the due date, otherwise the collaterals will be liquidated, and all principal and interest due should be repaid in advance;
6. During the life of the bonds, the issuer needs to pay attention to changes in the collateralization rate and timely replenishment, partial liquidation of the collaterals will be triggered when the value falls by 30 percent.
At present, the platform comprehensively evaluates the Collateralization rate based on the liquidity of the collateral and the number of people using it, and in the future, the Collateralization rates can be adjusted after full discussion and voting by the community.
Collateral | Collateralization rate |
ETH | 180% |
HBTC | 150% |
FOR | 500% |
HT | 500% |
OKB | 500% |
BAT | 500% |
ZRX | 500% |
imBTC | 150% |
REP | 500% |
CRO | 500% |
The minimum number of issues must not be less than USD 1,000, the maximum number of issues may vary depending on the collateral, please note the relevant tips. At the same time, the system will limit the maximum number of bonds to be issued per collateral to control liquidation risk.
BondTokens are investment certificates obtained after investing in a bond, BondTokens are ERC20 tokens that can be transferred, but are not divisible, and their face value is usually 100 USD.
All crypto bonds are over collateralized or secured by a third party. Generally, if the issuer defaults, the liquidation of the collaterals is sufficient to repay all debts. However, in extreme markets, there are still instances of insolvency, when investors are at risk of losing earnings or principal.
A credit rating is a qualitative assessment of the probability of a bond default, determined by a professional rating agency (or individual) and members of the ForTube community. Credit ratings are used as an investment reference only and are not a key basis for investment decisions.
Each credit rating is defined as follows：
Rating | Meaning |
A-1 | A top-tier short-term financing note with little risk of default and a high level of security. |
A-2 | Less risk of default and higher security. |
A-3 | Default risk is average and safety is vulnerable to adverse environmental changes. |
B | There is a high risk of on-time repayment and some risk of default. |
C | There is a very high risk of on-time repayment and a high risk of default. |
D | Can not pay off debt on time. |
Participation in the bond credit rating is available with FOR tokens. Once the voter knows the basic informations about the bond, they can lock the FOR to the corresponding credit rating and unlock the FOR once the rating is completed.
Professional credit ratings are conducted by professional agencies or professionals. Becoming a professional rating agency or individual requires submitting an application to the ForTube developer (later handed over to the community), providing materials that demonstrate professional competence and qualifications, and locking up 1 million FOR tokens to the system. Lockup tokens are not retrievable during the rating period and for the duration of the rated item.
The final rating will be determined by a combination of community ratings and professional ratings, with a community rating weight of 60 percent and a professional rating of 40 percent.
Participating credit ratings will receive a rating service fee, of which 60 percent will be allocated to the community and 40 percent to professional rating agencies or individuals. The rating service fee will be withdrawn only after the bonds are due for repayment, and if the debt cannot be paid, the fee will be deducted.
The ForTube platform provides a liquidation APIs for professional liquidation arbitrageurs to use, as well as a liquidation web pages for general users to participate in order to receive liquidation incentives.
The liquidator will be allowed to redeem the liquidated tokens at a certain discount, and if the liquidation discount is 85%, the liquidator may exchange $85 worth of stablecoins for $100 worth of liquidated pledge tokens, of which 15% is the proceeds of the liquidator. However, due to the high volatility of digital asset prices and the potential liquidity risk, liquidators need to participate in the liquidation with a full understanding of the risks.
