Instruments
MegaStrategy issues two types of bonds, each producing two tradable NFTs. This page explains how each instrument works.
Instrument Structure
Every bond series—whether BTC or USD denominated—issues:
Note NFT
Principal claim
Repaid at maturity per series terms
Warrant NFT
Upside optionality
Exercised by paying USDT par
Buyers receive both NFTs at subscription. They can hold both, sell one, or sell both on the secondary market.
Note NFT
The Note NFT represents your principal repayment rights.
What it is:
A claim on face value repayment at maturity
Transferable on-chain to any wallet
Settled according to the series' specific rules
What it is not:
Not an equity stake in the protocol
Not entitled to upside beyond par repayment
Not affected by warrant exercise activity (except that warrant proceeds improve series health)
At maturity: The protocol repays Note holders according to the series settlement waterfall. BTC Notes are repaid in BTC; USD Notes are repaid in USDT.
Warrant NFT
The Warrant NFT is an option-like instrument that can be exercised for upside.
Exercise mechanics:
Holder pays USDT par value to the protocol
Protocol credits the series ledger with the USDT
Holder receives the warrant's settlement value
Why warrants exist:
Bond buyers can sell warrants immediately for liquidity
Traders can speculate on warrants without bond exposure
Warrant exercises strengthen series repayment capacity
Par value: For both bond types, warrant par is denominated in USD and paid in USDT upon exercise.
BTC-Denominated Bonds
BTC bonds are designed for Bitcoin holders who want BTC-denominated principal protection plus separable upside.
Subscription
Pay in BTC
Receive Note NFT + Warrant NFT
Note NFT Terms
Face value denominated in BTC
Repaid in BTC at maturity
Principal protection is in BTC terms
Warrant NFT Terms
Par value equals the USD value of BTC face amount at issuance
Exercise is paid in USDT
Proceeds credit the series ledger
Proceeds Flow
When BTC bond warrants are exercised, the USDT proceeds enter the series ledger. Per policy, these may be converted to BTC to support BTC repayment obligations.
USD-Denominated Bonds
USD bonds are the protocol's primary scaling instrument. They raise USDT capital and are backed by dedicated USDT Backstop Pools.
Subscription
Pay in USDT
Receive Note NFT + Warrant NFT
Note NFT Terms
Face value denominated in USD
Repaid in USDT at maturity
Repayment backed by the series' USDT Backstop Pool
Warrant NFT Terms
Par value defined in series terms
Exercise is paid in USDT
Proceeds reduce required backstop lock
Backstop Mechanics
Each USD bond series has a dedicated USDT Backstop Pool funded by stakers. This pool backs Note repayment.
See USDT Backstop System for full details.
Instrument Comparison
Represents
Principal claim
Upside optionality
Value driver
Series solvency
Market demand / BTC price
Exercise required?
No (settled at maturity)
Yes (pay USDT par)
Trading activity
Expected: low
Expected: high
Effect on series
Defines obligations
Exercise strengthens ledger
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