Why are you participating for Based LatAm?

We at Bondi Finance are participating in Based LatAm because Latin America is the perfect region for our mission of tokenizing emerging market corporate bonds. Two of our co-founders are from Turkey but now live in Argentina, a country with high crypto adoption. Juan, who has played a key role in this buildathon, is from Argentina, and the rest of our team is based here as well. Latin America makes sense for us because of the region's openness to blockchain innovation and the urgent need for better financial access.

USD-denominated emerging market corporate bonds are largely inaccessible to most investors in Latin America, with 85% of them requiring entry thresholds above $100,000. Yet, these bonds offer asymmetric opportunities, as they historically default less and generate better returns than US bonds. By tokenizing these bonds, we aim to make them accessible to everyone, democratizing financial opportunities in the region.

What's our motivation?
Our motivation stems from the desire to provide Latin American investors with access to secure, USD-denominated investment opportunities. Many users in the region have asked us if these bonds are risky, which is why we built an insurance market for this buildathon. This feature provides an added layer of security, addressing concerns about risk and helping investors feel more confident in exploring these new opportunities.

With our entire team based in Argentina, we are deeply connected to the region and understand the challenges that local investors face. By leveraging blockchain and tokenization, we believe we can provide a more inclusive, efficient, and secure financial ecosystem that offers better opportunities for investors in Latin America and beyond.

What challenges are you focusing on?

At Bondi Finance, we are focused on addressing the inaccessibility of emerging market corporate bonds, which are typically out of reach for most investors due to high entry thresholds, often above $100,000. This creates a barrier, especially in regions like Latin America, where investors lack access to these high-yield opportunities. Additionally, we are tackling concerns about the risks associated with bond investments by developing an insurance market through a Credit Default Swap (CDS) mechanism. Finally, transparency in bond issuance and difficulty interacting with blockchain technology is another challenge we aim to resolve.

With Base’s infrastructure, we are solving these challenges by tokenizing corporate bonds and introducing multi-currency acceptance, allowing bond purchases with various cryptocurrencies. This makes bond investments more accessible and reduces the financial barriers for retail investors in Latin America. Base’s onchain reputation system helps decrease the collateral needed to issue CDS, making it easier and more affordable for investors to safeguard against bond defaults.

We are also leveraging Base’s naming infrastructure, assigning ENS basenames to each bond for clear identification. This enhances transparency and trust, allowing retail investors to verify bonds, vaults, and coupons onchain. Additionally, our Smart Wallet integration simplifies blockchain interaction, allowing even novice users to easily participate in the bond and CDS markets.

How does your submission address this challenge?

Our submission introduces a complete solution to democratize access to corporate bonds in emerging markets. By utilizing Base, we have tokenized bonds that can be bought with cryptocurrencies, lowering entry thresholds and enabling investors to diversify their portfolios with high-yield instruments. Through our Credit Default Swap (CDS) market, we provide investors with insurance against bond defaults, offering peace of mind in an often-volatile market.

The project also integrates transparency through ENS basenames and simplifies user interaction with blockchain through Coinbase Smart Wallet. These features reduce complexity, promote trust, and open up investment opportunities to a broader audience. By addressing these challenges, our project can have a significant impact on Latin American investors, offering them access to safer and more diversified financial products previously out of reach.

Challenges we ran into

One of the significant challenges we faced was migrating an app that was initially built for older provider versions. This required us to cross-check documentation across various sources to implement some of the newer hooks correctly. The process was particularly cumbersome because the documentation wasn't always consistent or comprehensive, which slowed our progress.

Additionally, we encountered issues with novel functions like basenames. While resolving the address from the basename worked, we struggled to resolve the basename from the address. This limitation affected the smooth integration of some key functionalities that were important for enhancing transparency and trust in our bond token ecosystem.

We also decided to migrate to thirdweb v5 instead of using onchain kit, which presented its own set of challenges. The migration process was complex, and finding adequate documentation proved difficult. The lack of clear and detailed guidance meant that we had to troubleshoot many aspects on our own, which added to the development time.

Despite these hurdles, we were able to overcome them by dedicating time to research, collaboration within our team, and trial-and-error implementation. These challenges ultimately helped us strengthen our understanding of the tools and improve our system's resilience.

Additional Features

While some foundational work on our project existed before the Buildathon, we introduced several new features and improvements during this event:
-Credit Default Swap (CDS) Market: A major addition during the Buildathon was the creation of a CDS market. This market enables investors to insure their bond investments through credit protection mechanisms. The CDS system lays the groundwork for a fully synthetic and decentralized insurance market, which can operate without real-world bond purchases.

-ENS Basenames Integration: We integrated ENS basenames into our system to ensure that each bond, along with its associated vaults and coupons, can be easily identified and verified onchain. This feature improves transparency and trust for retail investors, providing them with clear, accessible naming conventions for their assets.

-Coinbase Smart Wallet Integration: To make blockchain interactions more user-friendly, particularly for less-experienced users, we integrated Coinbase’s Smart Wallet. This integration simplifies access to bond token offerings and the CDS market, expanding the platform’s usability.

Although we have successfully implemented these features, some Base-specific improvements remain in progress:
-Onchain Reputation System: We plan to use Base’s reputation system to reduce the collateral required for issuing CDS, making it more efficient and lowering entry barriers.

-Expanded Basename Usage: Further integration of ENS basenames for vaults, contracts, and coupons is planned to enhance transparency and usability.

-Multi-Currency Acceptance: We aim to implement the ability to accept multiple cryptocurrencies for bond token (BT) and CDS funding, with automatic conversion to USDC or yield-bearing derivatives like aUSDT. Direct Coinbase balance acceptance is also part of this future plan.