# Plaza Finance > Plaza Finance is a platform for on-chain bonds and leverage, offering programmable derivatives like bondETH and levETH on the Base network. - Canonical URL: https://iq.wiki/wiki/plaza-finance - Categories: Projects & Protocols - Tags: DEX, DeFi, Infrastructure, NFT Marketplace - Created: 2025-05-07T18:32:34.914Z - Last updated: 2025-05-07T18:59:55.959Z - Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki) --- **Plaza Finance** is a platform for on-chain bonds and [leverage](https://iq.wiki/wiki/leverage), operating on the [Base](https://iq.wiki/wiki/base) [blockchain](https://iq.wiki/wiki/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](https://iq.wiki/wiki/solidity) [smart contracts](https://iq.wiki/wiki/smart-contract) deployed on [Base](https://iq.wiki/wiki/base), a [Layer 2](https://iq.wiki/wiki/layer-2) [Ethereum](https://iq.wiki/wiki/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](https://iq.wiki/wiki/ethereum) [liquid staking](https://iq.wiki/wiki/liquid-staking) derivatives (LSTs) and liquid restaking derivatives (LRTs) [[1]](#cite-id-KV9chGKKPE). The protocol enables users to deposit underlying pool assets like [wstETH](https://iq.wiki/wiki/wrapped-steth-wsteth) (wrapped staked Ethereum) and receive either bondETH or levETH in return. These tokens are represented as [ERC-20](https://iq.wiki/wiki/erc-20) tokens, making them composable with other [DeFi](https://iq.wiki/wiki/defi) protocols such as [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange) (DEXs), lending markets, and restaking platforms [[1]](#cite-id-KV9chGKKPE). Plaza Finance operates in a fully [permissionless](https://iq.wiki/wiki/permissionless) manner, with each core function of the protocol executable by anyone. The platform aims to provide more sophisticated financial instruments for [DeFi](https://iq.wiki/wiki/defi) users without increasing network complexity, offering alternatives to traditional futures markets and lending protocols for yield generation and [leverage](https://iq.wiki/wiki/leverage) [[2]](#cite-id-guiYXgjlqy). ## Key Products ### bondETH bondETH is designed for yield-focused investors seeking predictable returns from [Ethereum](https://iq.wiki/wiki/ethereum) [staking](https://iq.wiki/wiki/staking) without the complexity or volatility typically associated with [DeFi](https://iq.wiki/wiki/defi) investments. It functions as a high-yield bond backed by ETH LSTs and LRTs that provides users with: - Fixed [USDC](https://iq.wiki/wiki/usdc) income streams through quarterly coupon payments; - Exposure to a diversified pool of [liquid](https://iq.wiki/wiki/liquid) [staking](https://iq.wiki/wiki/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]](#cite-id-0qUjUmCGlT) [[2]](#cite-id-guiYXgjlqy). ### levETH levETH offers leveraged exposure to [Ethereum](https://iq.wiki/wiki/ethereum) without the [liquidation](https://iq.wiki/wiki/liquidation) risks typically associated with margin trading or borrowing. Key features include: - Synthetic [leverage](https://iq.wiki/wiki/leverage) without [liquidation](https://iq.wiki/wiki/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](https://iq.wiki/wiki/liquidation) monitoring. This product is designed for users with a [bullish](https://iq.wiki/wiki/bullish) outlook on [Ethereum](https://iq.wiki/wiki/ethereum) who want to amplify their exposure while minimizing downside risks compared to traditional leveraged trading methods [[3]](#cite-id-0qUjUmCGlT) [[2]](#cite-id-guiYXgjlqy). ## Protocol Mechanics Plaza Finance operates through several [core](https://iq.wiki/wiki/core-dao) mechanisms: ### Creation (Buy) Users can convert pool assets like [wstETH](https://iq.wiki/wiki/wrapped-steth-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]](#cite-id-Vct4NlAIs0). ### Redemption (Sell) Users can exchange their programmable derivatives (bondETH or levETH) back for underlying pool assets like [wstETH](https://iq.wiki/wiki/wrapped-steth-wsteth). This provides liquidity and exit options for token holders [[5]](#cite-id-G7nVM9kqo2). ### Coupon Claiming bondETH holders can collect [USDC](https://iq.wiki/wiki/usdc) payments at the end of each coupon distribution period. These payments represent the yield generated from the underlying staked assets [[6]](#cite-id-6dMlcMw7Ka). ### Merchant Auctions The protocol sells a portion of pool assets like [wstETH](https://iq.wiki/wiki/wrapped-steth-wsteth) in exchange for [USDC](https://iq.wiki/wiki/usdc) to distribute to bondETH holders at each coupon distribution. This mechanism ensures that bondETH holders receive their yield in a stable asset [[7]](#cite-id-J2on4ghrsA). ### Distribution The process of distributing [USDC](https://iq.wiki/wiki/usdc) to bondETH holders who can claim coupon payments during the distribution period [[8]](#cite-id-OhTIIDZ4aP). ## Technology Plaza Finance is built on a set of [Solidity](https://iq.wiki/wiki/solidity) [smart contracts](https://iq.wiki/wiki/smart-contract) deployed on the [Base](https://iq.wiki/wiki/base) [blockchain](https://iq.wiki/wiki/blockchain). The protocol relies on several key technological components: - **Chainlink Price Feeds**: [Oracle](https://iq.wiki/wiki/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](https://iq.wiki/wiki/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](https://iq.wiki/wiki/defi) platforms while supporting [Ethereum's](https://iq.wiki/wiki/ethereum) network security through [staking](https://iq.wiki/wiki/staking) [[9]](#cite-id-b0KXPzbdwW). ## Partnerships and Integrations Plaza Finance has established partnerships with several prominent [blockchain](https://iq.wiki/wiki/blockchain) projects: - **Base**: The primary [blockchain](https://iq.wiki/wiki/blockchain) where Plaza Finance is deployed; - **Coinbase Wallet**: [Wallet](https://iq.wiki/wiki/cryptocurrency-wallet) integration for user access; - **Chainlink**: Provides [oracle](https://iq.wiki/wiki/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](https://iq.wiki/wiki/decentralized-exchange) partner for trading Plaza's tokens. These partnerships enhance Plaza's functionality and reach across the [DeFi](https://iq.wiki/wiki/defi) ecosystem [[3]](#cite-id-0qUjUmCGlT) [[2]](#cite-id-guiYXgjlqy). ## 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](https://iq.wiki/wiki/cosmostation); - Ambush Capital; - Informal Systems; - Skip. This funding supports Plaza's development and expansion plans for its programmable derivatives platform [[2]](#cite-id-guiYXgjlqy) [[10]](#cite-id-byDSc3AVdZ). ## 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]](#cite-id-CjUYvAdNeE). ## Future Roadmap Plaza Finance has outlined several key initiatives for future development: - Cross-chain expansion through [LayerZero](https://iq.wiki/wiki/layerzero) integration; - Development of additional programmable derivatives including bondBTC and levBTC; - Support for [Solana](https://iq.wiki/wiki/solana)-based assets; - Integration with [real-world assets](https://iq.wiki/wiki/real-world-assets-rwas) (RWAs); - Expanded partnerships with major [DeFi](https://iq.wiki/wiki/defi) protocols. The long-term vision is to position Plaza as a comprehensive marketplace for tokenized investment products across multiple [blockchains](https://iq.wiki/wiki/blockchain). [[2]](#cite-id-guiYXgjlqy)[[12]](#cite-id-ZFhdvQ3KmV)