What are Digital Credit Note (DCN) Tokens?
A Digital Credit Note “DCN” Token, either a Perpetual Digital Credit Note (PDCN) token or a Fixed-Term Digital Credit Note (FDCN) token, are a blockchain-based financial instrument that represents a form of decentralized, Digital Asset Treasury collateralized and yield-generating debt capital with or without a fixed maturity date. Unlike traditional debt instruments that require regular refinancing or come with rigid principal repayment terms, DCNs offer a flexible structure and programmable yield distributions via Yield Tokens and the ability to add a convertible option via the smart contract. They are typically collateralized by a single asset or multi-asset Digital Asset Treasury, that is viewable on-chain or on HootDex itself. The Digital Asset Treasury may hold PECU coins, stablecoins such as USXM, USDT or wrapped tokens representing Bitcoin, Ethereum, Solana and other accepted digital assets. A feature specific to HootDex are Revenue and Operational obligation tokens, they allow an issuer to pledge their companies operations and revenue flow as additional guarantees directly in the Digital Asset Treasury. This was designed to provide lenders or investors with comfort in holding any DCN with steady and predictable returns via Yield Tokens, while giving issuers flexible, long-term capital options. DCNs are especially effective for leveraged buyouts, business acquisitions and structured financings where both transparency and adaptability are critical, serving as a powerful bridge between traditional finance (TradFi) and decentralized finance (DeFi).
Key Structure and Functionality
Ω Collateralization
Each DCN, whether it is a PDCN or FDCN, are fully collateralized by a Digital Asset Treasury that is locked and tethered to that DCN. The details and data are on-chain and publicly viewable on HootDex to ensure transparency and trust.
Ω Yield Distribution
lenders/Investors receive hourly yield distribution in the form of Yield Tokens, with quarterly, semi-annual or annual redemption obligations met by the issuer.
Ω Perpetual or Fixed-Term Nature
The instruments are either Perpetual “PDCN” without a fixed maturity date or Fixed-Term “FDCN” with a fixed maturity date, allowing companies to maintain long-term or short-term debt capital while providing continuous yield to investors.
Ω Decentralized Swapping
Once the lockup period determined by the issuer is lifted then the DCNs would be tradable initially on HootDex, discoverable on the DCN OTC Desk and on any platform that offers PECU or Pecu Novus digital assets.
Benefits of DCNs
For Issuers
Ω Alternative Capital Access
Enables companies to raise debt capital without relying on traditional financial institutions or restrictive covenants. Giving lenders comfort in the DCN being collateralized by a transparent multi-asset Digital Asset Treasury that is locked for the duration of the life of the DCN.
Ω No Maturity Pressure
The perpetual structure of a PDCN removes principal repayment deadlines, easing balance sheet stress. for FDCN’s there is a fixed maturity date
Ω Enhanced Market Trust
Collateralized by a multi-asset Digital Asset Treasury that is locked for the life of the DCN, with all data publicly available on-chain and via HootDex for full transparency boosts credibility with global investors.
Ω Improved Liquidity Options
Listing on HootDex initially for pricing discovery and eventual swapping, inclusion on the DCN OTC Desk and potential listings on other centralized or decentralized exchanges that offer PECU or Pecu Novus digital assets provide secondary market access for debt instruments, enhancing tradability and market visibility.
Ω Streamlined Debt Servicing
Automated hourly Yield Token distribution via smart contracts reduce administrative burdens and puts value in a lender or investors Pecu Wallet that is viewable.
For Investors
Ω Daily Yield
Access to otherwise inaccessible corporate debt, earn consistent returns via Yield Tokens, which are redeemed by the issuer either quarterly, semi-annually or annually.
Ω Transparency
On-chain auditability of the locked multi-asset Digital Asset Treasury, as well as public transparency of the DCN itself, the data and details, this ensures investor transparency and fraud prevention.
Ω 24/7 Access
Price discovery is constant, when trading is permitted then 24/7 access to liquidity options should be available.
Ω Liquidity Flexibility
DCNs can be privately transferred on a peer to peer basis after issuer defined lock up period expires, once swapping is permitted then various liquidity options will present themselves over time without traditional market frictions.
