Implementation and Security

CosmBank’s bond system is built with a focus on security, flexibility, and transparency. The smart contract architecture modularizes bond management while incorporating robust risk control mechanisms.

---

Smart Contract Architecture

BondFactory.sol

• A factory contract responsible for deploying various bond types (Reserve Bonds, Inverse Bonds, Liquidity Bonds, CSM Bonds).

• Supports dynamic parameter configuration during bond creation (e.g., vesting terms, discount parameters).

VestingContract.sol

• Manages the linear vesting schedules for all bond purchases.

• Ensures locked tokens cannot be prematurely claimed.

• Provides transparent, on-chain tracking of vested and claimable amounts.

Modular contracts enable flexible bond design, lifecycle management, and seamless upgrades without disrupting the protocol’s core operations.

---

Risk Control Measures

Dynamic BCV Adjustment

• The Bond Control Variable (BCV) can be adjusted via governance proposals.

• Allows dynamic control over inflation rates and issuance pacing based on market conditions.

Multi-Sig Governance Approval

• Critical parameter changes require multi-signature (multi-sig) approvals.

• A mandatory 48-hour timelock is enforced for all sensitive governance actions — allowing the community ample time to review and react to proposed changes.

A layered security model — combining dynamic governance and on-chain transparency — ensures both flexibility and protection against systemic risks.