Application Programming Interfaces (APIs) are the mechanism by which programs communicate and developers coordinate.
Think of the different token types as a piece of code that conforms to an API template.
The Ethereum Network provides credible neutrality upon which anyone can build... both independently and collaboratively.
Any developer can deploy (nearly) anything on-chain. Arbitrary applications are very difficult to integrate, and so the community has developed a set of token standards.
Each token standard was created to allow Ethereum applications (and therefore assets) to express more and different properties.
From ERC-20 (basic accounting and transfer) to ERC-4246 (deposit and accrue value), each successive standard builds upon the previous.
And now, we have our newest Ethereum token standard: ERC-3475, the bond token standard.
ERC-3475 is a new, multi-layered structure that allows an asset to issue and service debt without fracturing liquidity.
Bond: a borrower receives money and commits to returning it on a certain date.
ERC-3475 functions the same way, it can issue bonds, each with their own supply, redemption conditions and metadata.
All enforced by smart contract.
This new debt management layer will directly issue and service bonds, including bonds of different classes (fixed vs floating) and maturities.
All built on an ERC-20-like foundational layer that holds the underlying value.
It is critically important to understand the two-layer nature of ERC-3475, because while all the intricacies are in the bond layer, the real benefits are in the (foundational) value layer.
Bonds are not a new concept to De-Fi.
And yet, the space is a small shadow of its real world counterpart.
The issue with De-Fi bonds boils down to liquidity and complexity.
Each time a protocol issues a new bond it must issue an individual ERC-20 token.
It must not only service the bond, any overlapping bonds cannot share liquidity and funds cannot be rolled over after expiry
ERC-3475 is the solution to this on the protocol layer... the actually-touching-the-chain layer.
It provides the templating to create modern bonding system at the money-lego-level.
This is what programmable money looks like in 2022, just 2 years after the birth of De-Fi.
Just imagine year 10.
Now imagine year 100.
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