Plaza Finance is a platform for on-chain bonds and leverage, operating on the Base blockchain. It offers programmable derivatives that enable users to create and trade tokenized financial products with enhanced liquidity and composability compared to traditional synthetic contracts.

Overview

Plaza Finance functions as a cross-ecosystem hub for programmable derivatives, allowing users to access structured financial products through its protocol. The platform operates through a set of Solidity smart contracts deployed on Base, a Layer 2 Ethereum scaling solution. Plaza's core offerings include two primary products: bondETH and levETH, which represent different risk-return profiles derived from a pool of Ethereum liquid staking derivatives (LSTs) and liquid restaking derivatives (LRTs) ^[1].

The protocol enables users to deposit underlying pool assets like wstETH (wrapped staked Ethereum) and receive either bondETH or levETH in return. These tokens are represented as ERC-20 tokens, making them composable with other DeFi protocols such as decentralized exchanges (DEXs), lending markets, and restaking platforms ^[1].

Plaza Finance operates in a fully permissionless manner, with each core function of the protocol executable by anyone. The platform aims to provide more sophisticated financial instruments for DeFi users without increasing network complexity, offering alternatives to traditional futures markets and lending protocols for yield generation and leverage ^[2].

Key Products

bondETH

bondETH is designed for yield-focused investors seeking predictable returns from Ethereum staking without the complexity or volatility typically associated with DeFi investments. It functions as a high-yield bond backed by ETH LSTs and LRTs that provides users with:

• Fixed USDC income streams through quarterly coupon payments;
• Exposure to a diversified pool of liquid staking and restaking tokens;
• Lower volatility compared to direct ETH exposure;
• Composability with other DeFi protocols.

The bondETH token represents a more conservative investment strategy within the Plaza ecosystem, targeting users who prioritize stable income over capital appreciation ^{[3] [2]}.

levETH

levETH offers leveraged exposure to Ethereum without the liquidation risks typically associated with margin trading or borrowing. Key features include:

• Synthetic leverage without liquidation risk;
• "Set it and forget it" approach to leveraged positions;
• Exposure to ETH price movements with amplified returns;
• No need for active position management or liquidation monitoring.

This product is designed for users with a bullish outlook on Ethereum who want to amplify their exposure while minimizing downside risks compared to traditional leveraged trading methods ^{[3] [2]}.

Protocol Mechanics

Plaza Finance operates through several core mechanisms:

Creation (Buy)

Users can convert pool assets like wstETH into bondETH or levETH. This process involves interacting with the protocol's smart contracts to deposit the underlying asset and receive the corresponding derivative tokens ^[4].

Redemption (Sell)

Users can exchange their programmable derivatives (bondETH or levETH) back for underlying pool assets like wstETH. This provides liquidity and exit options for token holders ^[5].

Coupon Claiming

bondETH holders can collect USDC payments at the end of each coupon distribution period. These payments represent the yield generated from the underlying staked assets ^[6].

Merchant Auctions

The protocol sells a portion of pool assets like wstETH in exchange for USDC to distribute to bondETH holders at each coupon distribution. This mechanism ensures that bondETH holders receive their yield in a stable asset ^[7].

Distribution

The process of distributing USDC to bondETH holders who can claim coupon payments during the distribution period ^[8].

Technology

Plaza Finance is built on a set of Solidity smart contracts deployed on the Base blockchain. The protocol relies on several key technological components:

• Chainlink Price Feeds: Oracle services that provide price data for underlying assets and derivatives during creation and redemption processes;
• Conditional AMM: Determines the amount of returned assets based on prices and quantities during creations and redemptions;
• ERC20 Tokens: Both bondETH and levETH are implemented as standard ERC-20 tokens for maximum composability;
• Pool Contracts: Manage the underlying assets that back the derivative tokens;
• Distributor Contracts: Handle the distribution of coupon payments to bondETH holders.

The protocol's architecture allows its derivative tokens to remain liquid and integrate seamlessly with other DeFi platforms while supporting Ethereum's network security through staking ^[9].

Partnerships and Integrations

Plaza Finance has established partnerships with several prominent blockchain projects:

• Base: The primary blockchain where Plaza Finance is deployed;
• Coinbase Wallet: Wallet integration for user access;
• Chainlink: Provides oracle services for price feeds;
• EtherFi: Supports eETH as an underlying asset;
• Gelato: Automation services;
• LIFI: Cross-chain bridging capabilities;
• LayerZero: Partnership for cross-chain deployment of programmable derivatives;
• RainbowKit: Wallet connection interface;
• Renzo Protocol: Integration partner;
• Skip: Strategic partner;
• Kelp: Integration partner;
• Rocketpool: Supports rETH as an underlying asset;
• Aerodrome Finance: DEX partner for trading Plaza's tokens.

These partnerships enhance Plaza's functionality and reach across the DeFi ecosystem ^{[3] [2]}.

Funding and Investors

Plaza Finance secured a $2.5 million pre-seed funding round led by Anagram Ventures in 2024. Other investors include:

• Interop Ventures;
• Cosmostation;
• Ambush Capital;
• Informal Systems;
• Skip.

This funding supports Plaza's development and expansion plans for its programmable derivatives platform ^{[2] [10]}.

Community and Governance

Plaza Finance maintains an active community across several platforms. The project has implemented a points system called Plaza Points (PP) to reward early users and community members. This system has gone through multiple phases:

• Pre-Season Guide: Initial community building;
• Season 1 Guide: Expanded rewards and participation;
• Season 2 Guide: Current reward structure.

These points may potentially factor into future governance or token distribution plans ^[11].

Future Roadmap

Plaza Finance has outlined several key initiatives for future development:

• Cross-chain expansion through LayerZero integration;
• Development of additional programmable derivatives including bondBTC and levBTC;
• Support for Solana-based assets;
• Integration with real-world assets (RWAs);
• Expanded partnerships with major DeFi protocols.

The long-term vision is to position Plaza as a comprehensive marketplace for tokenized investment products across multiple blockchains. ^[2][12]