SigmaFi bonds

SigmaFi bonds are peer-to-peer loans on Ergo, backed by collateral. A borrower locks collateral, a lender lends ERG or a token against it, and the borrower repays a fixed amount by a fixed block. If they do not, the collateral goes to the lender. This page explains how a bond runs, how to borrow and lend from the web panel, and what your client does with bonds on its own.

It does not cover the API endpoints behind the panel, which are in the API reference under SigmaFi Bonds, or the settings for liquidating bonds, which are in Batching and orders.

What a bond is#

Every SigmaFi bond today is a zero-coupon bond. It pays no interest along the way: the borrower repays one amount, larger than the loan, at the end. A bond has these terms:

The difference between the repayment and the loan is the lender's return.

How a bond is made#

Borrowers create an order, locking their collateral with the requested loan amount, repayment, and maturity. A lender fills the order: the principal goes to the borrower and the collateral moves into the bond. The lender chooses and funds a separate batching reserve at this point. The borrower’s entire collateral remains protected from this fee. SigmaFi V2 does not support lender-created offers.

An order can fix its maturity to a block, or ask for a term counted from the block a lender fills it. A term counted from the fill does not shrink while the order waits. It must be at least 30 blocks.

Before an order is filled, its borrower can cancel it to recover the collateral.

The bond asset#

Filling an order mints two units of the bond asset: one locked in the bond, and one sent to the lender. Whoever holds the circulating unit is owed the bond. You can send or sell it like any token. Settlement burns the bond’s locked unit; claiming the vault burns the holder’s circulating unit.

A verified bond asset uses the circular SigmaFi mark with a small status-colored ZC badge. All lifecycle states use the dark mark. Compact collateral tooltips place the ZC badge beside the mark for readability. Hover or focus it to inspect repayment, maturity, collateral and any vault proceeds. LithosDex Provisions use the same detail cards as the Wallet. The Documentation link opens this page.

Its EIP-4 name is SigmaFi-ZC-Bond-<first six token ID characters>. A name and description are set by whoever minted a token, so they prove nothing. The panel uses SigmaFi Bond and LithosDex Provision as display labels for these assets. Anyone can mint a token with the same name. The web panel and Wallet check each bond asset against the chain and mark it ZC-Bond only when it is the asset its bond was created with. A token named like a bond asset that fails the check is marked Not a ZC-Bond.

How a bond ends#

A bond ends in one of two ways, and either way the lender's side goes to a vault for the bond asset's holder:

1. Repaid. Any block before maturity, the borrower pays the repayment into the vault, and the collateral returns to them. The lender-funded reserve moves into the vault with the repayment, so the bond holder recovers it on claim.
2. Liquidated. From maturity on, anyone can liquidate the bond. The collateral goes to the vault, while the liquidator may keep the separate lender-funded reserve. With the standard maturity liquidation rule, the vault receives at least all the borrower’s collateral and all collateral tokens.

The agreed liquidation expression determines both eligibility and payout contents. The client currently creates orders with MaturityLiquidation, which enforces the behavior above. The bond contract itself pins the vault, settlement tags and locked-unit burn; inspect any different liquidation expression before relying on its collateral payout. Principal amounts are carried in the live bond’s registers, so the client can read the agreed loan directly while separately checking the bond’s origin against its minting order.

The holder of the bond asset then claims what the vault holds for it. One claim takes the bond's own settlement output and at most 8 other vault boxes naming the asset, largest first, and burns the bond asset. A vault box the claim leaves out can never be claimed after, so the claim's check lists any such box before you send.

You do not need to liquidate bonds yourself. Lithos miners liquidate every matured bond that pays a batching fee of at least 0.05 ERG, in their own blocks first and by broadcast one block later.

Borrow or lend from the web panel#

Open Extensions > SigmaFi in the navbar. It has four views:

The Borrow form adds a 0.001 ERG box minimum to your entered ERG collateral. Entering 10 ERG locks 10.001 ERG, plus a separate creation network fee. There is no borrower fee-reserve input. On fill, a lender choosing a 0.05 ERG reserve funds that reserve in addition to the principal; the bond then holds 10.051 ERG. On repayment, 10.001 ERG returns to the borrower and the 0.05 ERG reserve goes to the bond holder’s vault with the repayment. NFT collateral is fixed at one unit, and NFT assets are excluded from the principal selector.

In Market, select Lend, enter the Batching reserve (ERG), and review the updated wallet impact. The form starts at 0.05 ERG. Any nonnegative amount is allowed, including zero, but clients on shipped settings skip automatic liquidation below 0.05 ERG. Changing the reserve requires a fresh preview.

The Search tab accepts a bond asset’s token ID and looks it up through your client. Wallet bond links open this page with that asset already selected. Click a SigmaFi Bond or LithosDex Provision in the collateral list, or its detail card, to open its own lookup. Each bond can lead to another bond, so you can follow any collateral chain without needing to own those assets. LithosDex provisions open LithosDex > NFT search with their token ID. Classification comes from the client’s chain checks; a matching name alone never establishes origin.

Hovering a bond asset shows Active, Matured, Repaid, or Liquidated, with matching icon-tray and badge colors. The client establishes settlement status from confirmed spend evidence. Its settlement transaction, block, payout, and returned collateral remain available after the vault output is claimed. Incomplete evidence is shown as Unknown, with the reason supplied by the client.

The loan term can be entered in days or whole blocks. Switching units preserves the block duration; days use an estimate of 720 blocks per day. Block input does not accept decimals.

Collateral Ratio and USD estimates#

The Collateral Ratio is the estimated USD value of the collateral divided by the loan principal. This is an informational health rating, with no price-based liquidation threshold. The agreed maturity and liquidation script determine when a bond can be liquidated.

ERG uses the client's confirmed erg-usd oracle. SigUSD and USE use an assumed $1 peg. Other prioritized, verified tokens use the deepest eligible LithosDex route to one of those assets, with up to three pools. Routes are ranked by their weakest quote-side USD reserve. Unsafe and unchecked pools are excluded; Spectrum pools are not used. The question-mark helper identifies the oracle and pool route used.

Estimates exclude batching fees, the box minimum, and slippage. Unpriced tokens and NFTs remain visible but are not valued. A ≥ percentage or dollar amount is a lower bound covering only priced collateral. Missing principal prices show an unavailable rating; stale oracle data is excluded from ERG pricing. The market can sort by Collateral Ratio or filter by minimum estimates and unpriced or partial collateral. The display is red at 80% or below, orange at 90%, yellow at 100%, and greener at 125%, 150%, 175%, and 200% or above. These colors do not change any liquidation rule.

Every action is checked by your client first and shows what you pay, what you receive and any warning before anything is signed. A check never signs or sends anything. The send uses your client's wallet and pays the quoted network fee (currently 0.001 ERG).

Choose the reserve before you lend. It is your money in addition to the principal, and is refunded on repayment. Under the standard maturity liquidation rule, it can pay the liquidator while the borrower’s collateral goes to the vault. The displayed collateral amount excludes the reserve and box minimum. A reserve below 0.05 ERG is left to manual liquidation by clients on shipped settings. The client’s single-bond liquidation action also needs enough reserve to pay its network fee and minimum reward output; a very small reserve may require a separately constructed transaction.

What can go wrong#

Next steps#

• Batching and orders: how your client liquidates bonds.
• Block packages: the sigmafi source that puts liquidations in your blocks.
• Difficulty forwards: the other extension.