Bond Core Logic and Design Philosophy

CosmBank Bonds are built upon a Sequential Dutch Auction (SDA) framework — an innovative financial primitive that enables direct asset exchange between the protocol and market participants, achieving multiple objectives:

• Decentralized Pricing Discovery: Bond prices are fully determined by market supply and demand without relying on external oracles.

• Liquidity Management: Dynamic regulation of CSM supply and demand to stabilize price fluctuations.

• Treasury Asset Accumulation: Optimized management of the protocol’s balance sheet through strategic bond sales.

Through bond-based mechanisms, CosmBank aligns protocol incentives with market dynamics — achieving decentralized stability and autonomous capital growth.