Swiss web3 project raises $8.5m from Circle and others to launch blockchain bonds

Obligate (formerly FQX) has raised $8.5 million from Circle Ventures, Blockchange Ventures, SIX Fintech Ventures, and others in a seed extension funding round. The capital will enable Obligate to launch its blockchain-based bonds and commercial paper issuance platform for companies.

Despite the devastating crypto winter, which has already wiped out more than $2 trillion from the global crypto market capitalization since late 2022, web3 projects continue to build innovative solutions that will lay a solid foundation for the next bull run.

In the latest development, Obligate (ex. FQX), a Switzerland-based web3 startup, has announced the successful conclusion of a seed extension funding round. It raised $8.5 million from several institutional investors, including Circle Ventures, SIX Fintech Ventures, and others.

Per the announcement, the Obligate platform will enable companies to issue on-chain bonds and commercial paper to secure funding from many investors cost-efficient, timely and regulatory-compliantly. 

Powered by the Polygon blockchain, the proposed bond issuance system will give investors access to a wide range of regulated digital debt assets that can be collateralized on-chain. 

Blockchain-based bond issuance gaining traction

Thanks to its smart contracts and tokenization, the Obligate platform eliminates intermediaries often associated with bond and commercial paper issuance on traditional platforms. This way, Obligate claims to slash issuance costs by 80%, and the time required to complete each process, from weeks to hours.

Circle Ventures’ Wyatt Lonergan commented:

“Through their platform, Obligate is adding utility and a complaint regulatory framework to the emerging real-world asset (RWA) DeFi market.”

If all goes as planned, the Obligate platform will go live in February 2023, offering users decentralized and regulated end-to-end debt funding.

While decentralized finance (DeFi), NFTs, and crypto remain some of the most popular use cases of distributed ledger technology (DLT), the nascent technology is rapidly gaining traction for institutional bond issuance. This trend is expected to continue well into the future.