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Examples

Walkthru from the perspectives of different users w/ different motives

As A DAO

Let's take an example where a DAO would like to issue convertible bonds against their token in their treasury. Below is an outline of the steps that would be required:
  1. 1.
    Determine defining attributes of convertible bonds
    • The following is a summarized list of parameters to be agreed upon via governance activity:
      • Tranche Configuration for defaulting
      • Penalty Ratio for defaulting
      • InitialPrice for the Initial Bond Offering (i.e. interest rate)
      • Maturity Date
  2. 2.
    Deploy Core Contracts with Factories
    • This involves deploying the buttonDAO token, buttonBond, ConvertibleBondBox, IBO-Box with their respective factories
  3. 3.
    Hold IBO
    • Create an IssueOrder by depositing DAO-Token into the IBO-Box and wait for lenders to create BuyOrders
    • If there isn't sufficient lending demand, the DAO can cancel it's IssueOrder
  4. 4.
    Activate the ConvertibleBondBox (CBB)
    • This will allow the DAO to execute it's IssueOrder (i.e. withdraw the StableToken Loan)
  5. 5.
    Repay the loan (optional)
    • When the DAO is ready, they can repay the StableTokens to the CBB (with interest) in order to get their collateral back
  6. 6.
    Redeeming after Default
    • If the DAO chooses to default on the loan, they need to wait until maturity to redeem their DebtSlip for the Junior Tranche

As a Lender

A lender in the free market who is looking to lend their stable tokens should do the following:
  1. 1.
    Participate in governance (off-chain)
    • Since the initialPrice (interest rate) is determined via governance, this is the best way to have influence on the interest rate
  2. 2.
    Create BuyOrders during IBO with StableTokens
  3. 3.
    Execute BuyOrders after the DAO activates the Bond
    • This will replace BuyOrder tokens with BondSlips
  4. 4.
    Redeem the BondSlips for StableTokens as soon as the DAO/borrowers repay
  5. 5.
    If the borrower does not repay, wait until maturity to redeem BondSlips for the Senior Tranche (includes interest).

As a Borrower

A borrower in the free market who is looking to borrow against their DAO tokens should do the following. The steps are identical as that of the DAO, except they are not responsible for activating the Bond Box:
  1. 1.
    Participate in governance (off-chain)
    • Since the initialPrice (interest rate) is determined via governance, this is the best way to have influence on the interest rate
  2. 2.
    Create IssueOrders during the IBO
  3. 3.
    Execute the IssueOrder after the DAO activates the CBB
    • This will replace IssueOrder tokens with DebtSlips + StableToken
    • Bear in mind that depending on lending demand there may not be enough stabletokens to borrow. In the event that there is not enough lenders, borrowers can withdraw their original initial deposit
  4. 4.
    Repay loan (optional)
    • This will return the entire collateral back to the borrower
  5. 5.
    Redeem after defaulting
    • If the loan is not repaid, the DebtSlips can be redeemed for the Junior Tranche of the collateral