Phaeton, a decentralised ledger system, announced the launch of Phaeton ESG Bond Exchange powered by blockchain technology. The launch of its Environmental, Social, and Governance (ESG) Bond fits well with Phaeton’s core ethos of using its technology to make a positive social impact. In addition, Phaeton is planning to take on the already crowded DeFi market with a new use case. While several DeFi protocols offer various payment solutions, such as lending and borrowing, Phaeton plans to serve a new market segment with its ESG Bonds.
Phaeton ESG Bonds will finance Phaeton’s projects, such as its Green Modular Data Centres, Smarter Housing and Solar Farms. However, the Phaeton ESG Bond Exchange will also be open to the public and governments worldwide, making it a diverse asset offering. Bond market stability is something Phaeton is banking on as bond markets play a significant role in ensuring financial stability for both buyers and issuers. When the stock market hits a correction, the bond market is a far more stable option for generating wealth.
Phaeton wants to tap into the growing ESG bonds market. One model, which has gained significant attention has been the growth of Green Bonds. Lately, corporate issuers have sought innovative ways to access the now burgeoning ESG-conscious capital market with new bond trading models such as transition bonds and sustainability-linked bonds. Additionally, the arrival of COVID-19 has also created a need for governments and enterprises to mitigate social risks. As a result, this has led to the rapid rise of so-called social bonds beginning in 2020.
How can Phaeton ESG Bond benefit Investors?
The corporate bond market is highly fragmented, illiquid, and opaque. Currently, only 26% of the $41 trillion US corporate bonds get traded electronically. Lack of standardisation and appropriate modern technology in these primary markets has a significant flow-on effect on secondary markets. For example, information asymmetry, inefficient pricing, expensive transactional costs, lengthy settlement times, and intensive administrative work hamper efficiencies and accelerate costs in secondary markets.
There are several reasons why Phaeton blockchain technology significantly improves the traditional Bond Marketplace.
- Phaeton Blockchain bonds are more efficient: The blockchain bond issuing process is simpler and efficient. Consequently, when bonds are moved into the secondary market, the process is far simpler, allowing investors to buy and sell their “bond tokens” directly, like bitcoin and other digital assets.
- Phaeton Blockchain bonds are more transparent: All the requisite information on issued bonds is stored on its Blockchain, bringing transparency to an otherwise closed system. This newfound transparency also improves bond ratings, which have been criticised for having a closed system.
- Phaeton Blockchain bonds are more trusted: The unique advantage delivered by Blockchain is complete transparency and immutability of transactions, thereby offering a higher level of trust. In addition, with Phaeton’s own distributed ledger technology (DLT), all data is available to all parties and is duplicated across a network of their Blockchain linked computers.
- Phaeton Blockchain cuts out the middlemen: Its Blockchain establishes a trustless synergy between stakeholders, which effectively eliminates intermediaries. In addition, Phaeton’s smart contract includes all the necessary information whereby businesses can streamline their related processes, making the complex trading procedure less time-consuming, cost-efficient, and risk-free.
- Bond Size and Liquidity: The high price for trading traditional bonds generally excludes smaller investors resulting in the lack of liquidity in the sector. Through Phaeton’s tokenisation technology, bonds can be fractionalised into smaller increments, as low as $100.00. Thus, allowing smaller investors to participate, thereby increasing transactions and liquidity within secondary markets.
- Lower Issuing Cost: Phaeton’s high-efficiency level helps cost reduction because of the decrease in the number of intermediaries involved in the bond process. Not only does it facilitate immediate distribution through smart contracts, but it also minimises reconciliation activities (e.g., cryptographic signatures remove the need for anti-fraud or error checks). Further, it delivers significant improvements in settlement times from the traditional 2–3 days settlement period to just seconds.
The high cost of issuance prevents corporations from acquiring cost-efficient capital. Many intermediary parties make up today’s bond market, including issuers, underwriters, transfer agents, payment agents, registration agents, broker-dealers/ investment banks, auditors, rating agencies etc. This traditionally bloated method of intermediaries adds a high cost to a bond issue. Phaeton’s Blockchain removes their participation as they are no longer required under its proprietary Blockchain.
Phaeton: Delivers 100% Green Infrastructure.
Phaeton blockchain has been developed to be significantly superior to other counterparts making it a truly web 3,0 protocol that has been designed for the future. Phaeton’s ecosystem offering gives users access to a decentralised global market. Its unique system of Side Chains allows the development of independent dApps, facilitating customisation, infinite scalability, and a profound departure from high network fees, thereby providing multiple previously unavailable and highly sought-after benefits to users. Furthermore, Phaeton’s protocol has been designed to make it highly cost-effective, high-speed, convenient, secure (military-grade encryption), and seamless for all stakeholders.
Phaeton focuses on applying its technology to deliver a positive social impact. This core value is used for all projects undertaken by Phaeton. Projects must have a positive social impact. To this end, Phaeton’s has created its Incubator Platform for Social Impact enterprises. In addition, Phaeton, under the motto of “Action Yields Results”, has initiated several of its own branded projects. Team Phaeton is, for example, working on affordable housing, renewable energy, carbon credits, health and wellness, education, social infrastructure, and sustainable agriculture. These are, of course, being built on Phaeton’s own 100% green infrastructure.
Phaeton’s Green infrastructure: designed to back products built on its own Blockchain.
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Contact Person: Chai Shepherd
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Source: Phaeton