On Wednesday the Telos blockchain introduced the launch of a brand new software designed to assist low-liquidity initiatives fundraise: a NFT produ
On Wednesday the Telos blockchain introduced the launch of a brand new software designed to assist low-liquidity initiatives fundraise: a NFT product often called a “T-Bond.”
In an interview with Cointelegraph, Douglas Horn — the creator of the Telos whitepaper and the CEO of GoodBlock, a improvement firm who assists with Telos core improvement — mentioned that token-based fundraising is a difficult drawback for each established and new initiatives.
“Many crypto initiatives face challenges just like our personal. Telos by no means raised any cash in a token sale, however many who have executed ICOs see their funds operating low earlier than their initiatives are market prepared,” he mentioned. “These initiatives discover themselves with token reserves they cannot promote with out instantly tanking their costs as liquid tokens go in the marketplace.”
One potential resolution is Telos’ new product: the T-Bond. T-Bonds are bundles of fungible tokens which have been locked into non-fungible tokens (NFTs) till a sure situation is met — for example, the passage of a sure period of time or the launch of a mainnet.
Because of promoting T-Bonds, initiatives can hypothetically increase funds with out tanking their token costs. Moreover, with the appearance of yield-bearing tokens, T-Bonds have the potential to turn out to be a software for buyers to hedge yield as properly:
“For tokens which have staking rewards, T-Bond NFTs may act equally to a T-Invoice as a hedge towards altering charges,” mentioned Horn. “In order that creates an thrilling derivative-like DeFi primitive.”
Unsurprisingly, one of many first functions of T-Bonds will likely be serving to Telos construct liquidity for its personal TLOS token. TLOS has had a brutal yr whereas a lot of the remainder of the blockchain ecosystem flourished, dropping from $.05 per token to $.02.
Horn, nonetheless, says an absence of liquidity, not adoption, is the first barrier to cost appreciation.
“Buyers continually come to us asking concerning the challenge […] however they haven’t made the big investments they want as a result of there’s not a lot liquidity, which means that their very own investments — even reasonable investments within the tens of hundreds of {dollars} — would create a 5-10X of the market worth proper there.”
As an answer, Telos has drawn up a technique it calls TULIP (Telos Uniswap Liquidity Implementation Plan): Telos will increase funds by way of a T-Bond sale that can then be used to seed a liquidity pool on Uniswap, a plan that attracts inspiration from the profitable Uniswap launch of Katalyo, a tokenized actual property dApp on Telos.
As a brand new bull market dawns and initiatives look to money in, Horn additionally believes T-Bonds may properly assist a variety of different initiatives with their funding woes as properly.
“The identical method that T-Bond NFTs assist Telos stage up by fixing our liquidity and quantity issues we imagine we can assist others. I believe it may create a very sturdy marketplace for main sale fundraising adopted by secondary market hedging.”