XMG
About XMG
Careers
Contact Us
Risk Disclosure
What are Fixed-Term Digital Credit Note Tokens?
Fixed-Term Digital Credit Note (FDCN) tokens are an innovative class of financial instruments that merge the credibility and structure of traditional credit notes with the automation, transparency, and global accessibility of decentralized finance. Digitally native and staked with overcollateralized digital assets and/or tokenized real world assets held in a smart contract locked Digital Asset Treasury on the Pecu Novus Blockchain, FDCNs are issued directly by the issuer (underwriting party), all of which further elevates the comfort between the issuer and the lender.
These instruments generate hourly yield through programmable smart contracts, delivering returns via Yield Tokens. Designed for both debt capital formation and automatic yield generation, FDCNs offer price stability, future liquidity, hourly yield, quarterly redemptions directly by the issuer and transparent alternative that can be listed and traded across decentralized or centralized exchanges worldwide.
Key Characteristics of FDCN Tokens
Asset-Backed
FDCNs are collateralized/staked by a smart contract locked Digital Asset Treasury, ensuring intrinsic value and risk mitigation.
Fixed-Term Structure
Similar to traditional debt, FDCNs can have a fixed maturity date or tranches, enabling long-term capital efficiency.
Programmable Yield
Smart contracts automate hourly yield distribution to holders in the form of Yield Tokens.
Convertible Flexibility
FDCNs can be structured to convert into equity under predefined conditions, supporting growth strategies.
Exchange-Ready Liquidity
FDCNs are designed for listing and trading on decentralized and centralized exchanges, enhancing market access.
Regulatory Simplicity
FDCNs can be structured to avoid classification as securities, streamlining compliance and distribution.
Utility and Advantages
Key Utilities of FDCN tokens
Debt Financing Alternative: Serve as a non-traditional instrument for raising debt capital, allowing companies to access liquidity without issuing equity or traditional bonds.
Yield Generation: Automatically distribute hourly yield to holders through programmable smart contracts via Yield Tokens.
Collateralized Asset Backing: Provide secured collateral exposure to digital assets and tokenized real-world assets in a smart contract locked Digital Asset Treasury, increasing investor confidence and reducing lender risk.
Tokenized Debt Structuring: Enable efficient packaging and transfer of debt instruments on-chain for fractional ownership and global accessibility.
Equity Conversion Mechanism: Can be structured to convert into equity under specific conditions, creating hybrid debt capital structures ideal for turnarounds or growth phases.
Secondary Market Trading: Potential for listing on decentralized exchanges like HootDex or other exchanges that choose to list it , enabling peer-to-peer trading and improved liquidity.
Restructuring and Recovery Tool: Ideal for distressed debt resolution, allowing stakeholders to convert impaired obligations into yield-bearing instruments during turnaround efforts.
Cross-Border Financing Enablement: Operate seamlessly across jurisdictions via blockchain infrastructure, facilitating global lender participation and secondary market investor participation, streamlining compliance.
Key Advantages of FDCN Tokens
Fixed-Term Structure: Programmable fixed-term maturity date or tranches of dates, allowing investors to maintain fixed-term maturity date positions and give issuers the option of refinancing.
Daily Yield Distribution: Automated hourly yield distribution via smart contracts in Yield Tokens, offering immediate visibility, quarterly redemptions directly by the issuer and consistent income for investors.
Asset-Backed Security: Collateralized/Staked by smart contract locked Digital Asset Treasury, increasing trust and reducing default risk for lenders and secondary market investors.
Non-Dilutive Capital Formation: Enables issuers to raise debt capital without giving up equity or voting control, preserving shareholder value.
Programmable Smart Contracts: Transparent, rules-based enforcement and distribution of terms, removing ambiguity and reducing reliance on intermediaries.
Liquidity Options: Potential for secondary market trading on decentralized and centralized exchanges, offering exit and entry points for investors.
Convertible Flexibility: Can be designed to convert into equity under certain terms, providing a dynamic bridge between debt and ownership.
Institutional-Grade Compliance: Can integrate KYC/AML processes native to centralized financial institutions when centrally held by financial institutions via FIX API for transparency, enabling adoption by regulated entities.
TradFi and DeFi Convergence: Bridges traditional finance mechanisms with decentralized systems, opening access to broader markets and innovation.
Resilience in Distressed Scenarios: Especially effective in capturing and restructuring distressed senior debt while preserving value through automated recovery protocols.
