Optim Finance Introduces the First-ever ISPO Bond (7% APY | Real Yield)

Optim Labs
4 min readJun 27, 2023
ISPO Bonds

Introduction.

Optim Finance is thrilled to announce the issuance of the very first Initial Stake Pool Offering (ISPO) bond. The bond is for 250,000 ADA, boasting an impressive ADA APY of 7%. This pioneering financial instrument is specifically tailored to meet the diverse needs of the Cardano community, enabling anyone to borrow ADA delegation rights to direct to a Cardano ISPO of their choosing. This allows for the delegation of more ADA than one has possession of to ISPOs, facilitating the growth of the ecosystem and projects that resonate with their values.

The 250K ADA ISPO Bond is 6 months/36 epochs in duration, providing the highest ‘real yield’ available for a large peer-to-pool loan on the Cardano blockchain.

Lenders can confidently lock their ADA into a smart contract, allowing a borrower to attach their stake key in exchange for a predetermined interest rate over a fixed period.

Note: The 1st ISPO bond has been filled already. For details, click here: https://app.optim.finance/pools/1dd6ddf0ef1580264b19db97d8e311b80c0922633c6567af5be5c0724f4e6864

A Novel Approach to Delegation Rights Lending and Borrowing on Cardano.

Liquidity Bonds introduce an innovative approach to lending and borrowing delegation rights within the Cardano ecosystem. A lender securely locks ADA into a smart contract, then a ‘borrower’ can attach their stake key to the lender’s ADA by paying a predetermined interest rate for a specified duration.

SPO (Stake Pool Operator) Bonds, launched in December of 2022, enable SPOs to borrow the staking rights to large amounts of ADA (500K — 1.5MM) in order to bootstrap their stake pools. SPOs can immediately mint blocks consistently and provide a competitive return on ADA while marketing their pools.

ISPO (Initial Stake Pool Offering) Bonds enable anyone to borrow the staking rights to ADA in order to delegate them to an ISPO. This empowers Cardano supporters to delegate large amounts of ADA (far more than they might own) to an ISPO, thus receiving a larger airdrop of the project’s governance tokens. This can promote the growth of the ecosystem and the projects that drive it forward.

It is important to note that all types of bonds, at their core, are the same.

Every Bond Token has a face value of 100 ADA. Meaning every Bond Token can be redeemed for 100 ADA + accrued interest within a predefined time window in the future. The 100 ADA of each bond token represents the 100 ADA of staking rights that have been lent to a borrower.

The different ‘types’ of bonds — SPO, IBO, ISO, etc. — all simply refer to different borrowers (use cases) and the likely duration, interest type, and interest rate a lender will see from these borrowers.

For more detailed information and an overview of Liquidity Bonds, check out the following: https://optim-labs.medium.com/liquidity-bonds-simplified-43ae62c1e6df

A First Glimpse of ISPO Bonds

The first ISPO Bond issued on Optim Finance uses the SPO Bond user interface. Thus the bond is for a larger amount (250K ADA) and a longer duration (6 months). These preset options are currently the minimum ADA amount and duration SPOs have the option to borrow.

However, in the next 4–6 weeks Optim will release an upgraded dApp front-end that will give users the option to issue bonds to borrow ADA staking rights for smaller durations and shorter timeframes.

A user will be able to borrow any arbitrary amount of ADA for 1,3,6, and 9 months to delegate to ISPOs of their choosing.

Catering to the Diverse Needs of the Cardano Community.

Understanding the diverse needs within the Cardano community, our ISPO bond is designed to provide a flexible solution for ecosystem supporters and investors. While our Stake Pool Operator (SPO) bonds are tailored to operators who require a minimum of 1 million ADA and a one-year commitment to bootstrap organic delegation, our ISPO bond offers a more adaptable alternative.

The ISPO bond accommodates a wide range of delegation amounts and durations, typically ranging from 1 to 6 months, to meet the varying requirements of ISPO campaigns. This versatility allows Cardano community members to support projects they believe in while enjoying the benefits of a secure and rewarding investment.

Unwavering Commitment to Security and Reliability.

At Optim Finance, security is our top priority. Our ISPO bond’s backend smart contracts are the exact same as our SPO bonds, which have been live for over six months.

We have collaborated with highly respected security firms, Tweag and MLabs, to conduct a comprehensive audit of our smart contracts. This thorough approach ensures that our users can have confidence when interacting with the protocol, knowing the highest industry standards have been applied to our code.

Interested in issuing your own bond? Click here: https://app.optim.finance/dashboard

Ready to join the revolution? Stay connected with us by following us on Twitter, joining our Discord community, and subscribing to our Medium for the latest updates, announcements, and opportunities to get involved.

Let’s shape the future of DeFi on Cardano together!

--

--