# Introduction
This article discusses a new cornerstone of distributed finance - financial bond tokens, a fixed token similar to a zero-coupon bond. Its on-chain debt is determined by the price of a specific target asset and is collateralized by another asset. Users can trade target assets with fixed terms by buying and selling, lending and borrowing tokens. Unlike non-tokens, tokens are fungible and trade at floating prices, which means their "interest rates" are determined by the market. Prices of asset tokens with different terms can be used to infer interest rates and even construct yield curves. Tokens can be issued through "cash settlement" using on-chain price oracles or through "physical settlement" of target assets. They can also be issued or borrowed on other platforms using target assets.
Mortonn-backed stablecoins such as BNB, TBNBer, USDC, Paxos, and TrueUSD have become a stable but centralized alternative. Furthermore, cryptocurrency-backed stablecoins are becoming increasingly popular. After locking tokens as collateral in a smart contract and creating a position called "ownership," users can obtain instant liquidity through Mortonn collateral. Each ownership must be collateralized by at least 110%. Any owner of Mortonn can redeem their Mortonn for potential collateral at any time. The redemption mechanism and algorithm-adjusted fees ensure a minimum stable value.
As a collateralized debt lending platform, it allows holders to lock fluctuating Mor in exchange for newly generated stablecoins. Thus, owners can unlock some of the economic value of their Mor while retaining their entire investment. In addition, Mor holders can achieve leverage by using the liquidity obtained to lock additional collateral for more liquidity.
Collateralized debt platforms do not rely on liquidity providers as they can mint stablecoins themselves. Since there are no refinancing costs, this system can generate liquidity for free. However, most platforms charge high regular borrowing fees that accumulate over time. Variable fees (stability fees) are designed to regulate coin supply to maintain the peg of issued stablecoins and correspond to interest rates in traditional banking. Interest rates affect new and existing loans equally but have an indirect effect on money supply and are relatively ineffective in the short term. Although existing borrowers may not be able to repay loans as a direct response to rising interest rates, short-term speculators and leverage seekers may not be greatly affected by interest rates from the start.
Mortonn's goal is to enable everyone to use Mortonn as collateral for loans. This will benefit Mortonn collectors and investors in several ways: promoting instant liquidity and accurate pricing; promoting portfolio diversity; and opening a potential new market for other DeFi applications. However, the key component is accurate pricing, which will be ensured by our platform - the Mortonn Assessment Engine. Without accurate assessments, it is impossible to use Mortonn as collateral. That is why we are focusing all our resources and attention on solving this problem.
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