Bonds Use Case

Tokenizing Bonds

A bond fund is seeking to expand its investor base by tokenizing bonds, enabling greater accessibility and liquidity. PIXL Platform facilitates the process, allowing fractional ownership of bonds with blockchain-based tokens, creating a more efficient and transparent investment experience.

Tokenizing Bonds for Accessibility

Example Bonds:

Tech Innovators Bond Fund
  • Focus: High-growth startups in AI, cybersecurity, and green energy
  • APY: 12.2%
  • Bond Term: 5 years
Blue-Chip Stability Bond Bundle
  • Focus: Bonds from established corporations in consumer goods and pharmaceuticals
  • APY: 5.7%
  • Bond Term: 7-10 years
Emerging Markets Infra Fund
  • Focus: Bonds supporting infrastructure projects in LATAM & SE Asia
  • APY: 10.8%
  • Bond Term: 5 years
Process of Tokenizing Bonds
Token Creation
  • Each bond or bond fund is divided into fractionalized digital tokens, representing ownership stakes in the bond.
  • For instance, a £10 million bond could be tokenized into 1 million tokens, with each token representing £10.
Blockchain Integration
  • The bonds are registered on the Polygon blockchain, ensuring immutable records of ownership and transactions.
  • Smart contracts govern the bond terms, including coupon (interest) payments and maturity payouts.
Platform Listing
  • The tokenized bonds are listed on the PIXL Platform for global investors to purchase, enabling fractional participation in high-value bond funds.
Investor Participation
Accessible Entry
  • Investors can buy tokens with as little as £100, democratizing access to bond markets typically limited to institutional investors.
Real-Time Transactions
  • Bond tokens can be bought, sold, or traded on the PIXL Platform Secondary Marketplace, providing liquidity that traditional bonds lack.
Automated Returns
  • Coupons (interest payments) are distributed directly to token holders via smart contracts on a pre-defined schedule (e.g., quarterly or annually).
  • At maturity, the principal amount is automatically returned to token holders.
Benefits of Tokenized Bonds
For Investors
  • Fractional Ownership: Gain access to high-value bonds without requiring significant capital.
  • Enhanced Liquidity: Trade bond tokens on the Secondary Marketplace, unlike traditional bonds that require long-term lock-ins.
  • Diverse Investment Options: Invest in a range of bonds across sectors and geographies, from high-growth startups to stable corporations and infrastructure projects.
For Bond Issuers
  • Expanded Investor Base: Attract retail and global investors who may not typically participate in bond markets.
  • Efficient Fundraising: Tokenization simplifies the issuance process, reducing costs associated with intermediaries and manual processes.
  • Transparency: Blockchain-based records enhance trust by providing a clear view of bond performance and transactions.
For the Platform
  • Increased Liquidity: Tokenized bonds bring more activity to the PIXL Platform ecosystem, benefiting both issuers and investors.
  • Global Reach: Enables cross-border bond investments, facilitating access to high-growth emerging markets.
Real-World Example: Tokenizing the Emerging Markets Infra Fund
  • The £50 million bond fund is divided into 5 million tokens, with each token worth £10.
  • Tokens are listed on the PIXL Platform, enabling retail investors worldwide to participate with as little as £100.
  • Investors earn an annual return of 10.8% APY, distributed automatically through smart contracts.
  • At the end of 5 years, the principal (£50 million) is returned to token holders.
Why Tokenizing Bonds Matters
  • Democratizing Bond Investments: Retail investors gain access to an asset class typically dominated by institutions, fostering financial inclusion.
  • Enhancing Liquidity: Tokenized bonds can be traded like stocks or cryptocurrencies, offering investors flexibility and quicker access to funds.
  • Transparency and Trust: Blockchain ensures that bond terms, ownership records, and transactions are immutable and verifiable, building confidence among investors.
  • Global Accessibility: Investors worldwide can participate in diverse bond markets, from blue-chip corporations to emerging markets infrastructure projects.
Future Potential of Tokenized Bonds
  • ESG Bonds: Tokenizing green or sustainability-focused bonds to attract ethically driven investors.
  • Regional Expansion: Tokenizing municipal or government bonds to support local infrastructure development.
  • DeFi Integration: Allowing tokenized bonds to be used in collateralized lending, liquidity pools, or yield farming, merging traditional finance with decentralized finance.
Impact of Tokenized Bonds

By enabling bond tokenization, PIXL Platform empowers both investors and issuers to engage in a more accessible, liquid, and transparent market. This innovation bridges the gap between traditional and decentralized finance, unlocking new opportunities for wealth creation and capital mobilization.