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Tokenized Liquidity Bonds Meaning

Tokenized liquidity bonds are blockchain-issued instruments that represent capital committed to providing liquidity in exchange for fixed or variable returns. Unlike traditional bonds, their yield may be linked to trading fees, protocol revenue, or liquidity utilization metrics.

These instruments allow protocols or venues to attract long-term liquidity while offering predictable income streams to investors. Smart contracts manage issuance, coupon distribution, and maturity, reducing administrative overhead and settlement delays.

From an institutional perspective, tokenized liquidity bonds combine fixed-income characteristics with DeFi-native risk factors.

Their attractiveness depends on transparency of revenue sources, contract security, and the stability of underlying liquidity demand.

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