In an exciting move for the sustainable-agriculture industry, Lamar Olive Oil has become the first company to issue an on-chain bond using Obligate, a decentralized finance (DeFi) platform based in Switzerland. But what exactly does this mean?
Well, Lamar Olive Oil's bond is unique because it is denominated in Membrane Finance's EUROe, which happens to be the only crypto stablecoin regulated by the European Union. This adds an extra layer of credibility and stability to the bond.
To make this groundbreaking initiative possible, Obligate partnered with Credora, a credit rating company responsible for the underwriting and structuring process. They evaluated the creditworthiness of Lamar Olive Oil and will continue to monitor risks associated with the bond.
One of the most exciting aspects of Obligate is that it operates on the Polygon blockchain. This innovative technology empowers small and medium-sized enterprises, providing them with a secure and transparent method for issuing, tracking, and settling debt. By lowering the thresholds for bond issuance, companies in developing and emerging markets can now access funding more easily than ever before.
So, how does it work? Traditional bond issuances typically involve various intermediaries, but Obligate simplifies the process through the use of smart contracts. These contracts automate tasks such as issuing bonds and handling payments, eliminating the need for an issuer and paying agent in the settlement layer.
In summary, Lamar Olive Oil's on-chain bond issuance on Obligate is a significant milestone for the sustainable-agriculture industry. It showcases the potential of decentralized finance and highlights the benefits of using blockchain technology to streamline and democratize funding opportunities. Exciting times lie ahead for the world of finance!