Background

Bonds have been around for centuries, with the first recorded instance dating back to ancient Mesopotamia (modern-day Iraq) around 3000 BC. Over time, bonds have evolved and become very complex, with different types of bonds being created to meet the needs of different investors. In the 20th century, bonds grew immensely in popularity, becoming a key component of the global financial system.

The development of blockchain technology in the 21st century has the potential to revolutionize the bond market. Smart bonds, which are digital bonds stored on a distributed ledger, offer a number of advantages over traditional bonds, including:

• Enhanced efficiency and liquidity: Smart bonds can be traded more quickly and easily than traditional bonds, as they do not require the physical transfer of certificates.

• Reduced costs: Smart bonds can be issued and managed more cheaply than traditional bonds, as they do not require the same level of administrative overhead. This saves issuers money and makes bonds more attractive to investors.

• Simplified and democratized capital raising: Smart bonds can make it easier for issuers to raise capital, as they can be issued to a wider pool of investors. This can be particularly beneficial for emerging chains.

On Kosmos, any crypto token (fungible or non-fungible) can be wrapped and locked for a fixed duration, from which it can be purchased and re-sold. This opens up a world of opportunities for traders, projects, and foundations looking for better financialization in their ecosystem.