Use Cases

All interest earned by lenders for the right to their ADA stake key/delegation is paid into bonds by borrowers. Every ‘bond issuer’ or borrower fully controls the stake key to all borrowed ADA and can accumulate the associated staking rewards if they choose. Borrowers receive an Ownership NFT that gives them control over the staking key for borrowed ADA. This Ownership NFT can be transferred, sold, etc. to anyone who wishes to pay the required interest and meet the predefined terms for the duration of the bond.

This enables anyone to borrow ADA delegation for any purpose by simply paying interest into a bond.

An SPO can borrow delegation to bootstrap their pool (SPO bonds). An investor/project supporter can borrow delegation to participate in an ISO (ISO bonds). A project can borrow ADA to delegate to any Stake Pool they choose, earn staking rewards to raise capital, and pay interest only in their token or a future airdrop to bond buyers (IBO bonds).

From a usefulness standpoint it is worth noting that by proxy this system also allows for 'delegation' to private pools as if the pool owner uses their key in the position and increases the pledge, it will count towards it.