Capture the yields of U.S. government bonds (Notes, Bills, Bonds) on chain.
Can I get interest on the dBonds token I purchased?
If you buy the dBonds Token, buy it with a discount, After the maturity date, you can redeem your dBonds Token 1:1 back to USDC. The difference between the discounted price and the face value is the interest you earn from dBond.
To help you better understand the context, dBond is anchored to US Treasuries, with similar properties.
There are three types of U.S. Treasuries: Bills, Notes, and Bonds, among which Bonds can only be purchased by U.S. residents using their U.S. resident identities and are not transferable. To eliminate the barrier, dBonds enables you to access all of them on-chain, one-stop, no matter where you are from and who you are.
Currently, Duet Protocol only offers US Treasury Bills. More types of bonds may be offered in the future, please stay tuned.
US Treasury Bills are discount bonds, which means they are initially issued at a discount (generally related to the federal rate) and can be redeemed at maturity for their face value, and the difference between the discounted price and the face value is the bond's interest rate.
How does dBonds (Duet Bonds) work?
After a user purchases a dBond Token using USDC, we exchange the received funds into US dollars and purchase US Treasuries; upon maturity, we convert the redeemed US dollars from the Treasuries into USDC deposit contracts; all proceeds come from US Treasuries issued by the US Treasury.
Can I redeem my USDCs early?
You can't do that directly. However, you can trade it. We set aside a percentage of USDC (similar to a bank's reserve) in the contract, you can trade with the contract in real-time at a price close to the current secondary market. We also plan to introduce an LP mechanism in the future to build an on-chain secondary market for U.S. Treasuries.
In comparison, in the traditional market, you may lose some of the expected return by transferring outstanding bonds, because you need to discount in order to onboard potential buyers.
Is the security of my deposited funds guaranteed?
The dBonds series is issued by Metabase Labs and all dBond Tokens are 100% backed by a corresponding number of U.S. Treasuries. We regularly release our proof of holdings. Our contracts are audited. Unlike the fully decentralized DeFi protocols, we are in fact a hybrid protocol with relatively controlled contract risk, similar to USDC and BUSD. USDC deposited by users will be used to buy treasury bonds, while the real savings funds are in USD and treasury bonds. As the blockchain only serves as a bookkeeping credential, you don't need to worry about the risk of project failure due to contract security issues.