What is Coffer
Coffer is a set of smart contracts on the Ethereum network. A validator deploys their own Coffer contract and sets it as the validator’s withdrawal credentials on the consensus layer. From then on the stake’s earnings flow to that contract, and the contract itself can trigger withdrawals from the stake, including a full exit. On that footing the validator sells bonds against the stake.
A holder pays ETH for a bond and receives an NFT. The bond pays a fixed amount, the maturity value, on a set date. The payment comes from the ETH sitting in the contract, which the validator’s withdrawals keep funded. How a bond works walks through the numbers.
The Coffer contracts rely on the Ethereum protocol alone, with no oracles and no governance. The contract code is immutable, and the one protocol fee follows a fixed schedule that no party can change.
The two parties
Section titled “The two parties”The validator raises liquidity without exiting and without reducing stake. The principal of every bond, net of the protocol fee, lands in the validator’s own wallet. In return the validator carries one duty, keeping the contract funded so each bond can be paid at maturity. A validator that pays every bond on time keeps validator status throughout. If a matured bond is not paid, anyone can declare the validator’s default, and the entire stake can then be withdrawn into the contract to pay the holders.
The holder earns a fixed rate for an agreed period, backed by one validator’s stake and enforced by the contract. The bond is an NFT, so the holder can keep it to maturity or transfer it. The protocol enforces no minimum backing beyond what is observable at purchase, so the holder evaluates the validator before buying.
Permissionless and non custodial
Section titled “Permissionless and non custodial”The software is permissionless. Anyone can deploy a Coffer and anyone can buy a bond. Whether a given person may issue or buy bonds depends on the laws applicable to that person, which are their own responsibility.
Nobody stands between a user and the contracts. Every transaction is signed in the user’s own wallet and executed by the network. Nothing in the protocol can reverse, cancel or change a transaction, and no party holds a user’s funds, keys or NFTs.
The app
Section titled “The app”The app at hoodi.app.coffer.bond is a website that reads the state of the contracts and sends transactions to them from the user’s own wallet. The three parts and what each one is trusted with are on Architecture.
What is published and what is not
Section titled “What is published and what is not”The source of the Coffer contracts and the marketplace contract is published on GitHub, in coffer-smart-contracts and coffer-marketplace, under the Business Source License 1.1, which the Terms describe. When Coffer runs on the Ethereum mainnet, the code at each mainnet address will be verified on the block explorer. The whitepaper and its source are published on GitHub too, in coffer-whitepaper. The app’s source is not published. The app is one way to use the contracts. The contracts also work without it, and everything the app shows you can be checked on the chain. These pages say how.
The marketplace is a separate system
Section titled “The marketplace is a separate system”Each bond is an NFT, minted when the bond is bought, and a bond moves by transferring its NFT, see Your bond as an NFT. The protocol contracts do not operate a trading venue. Any marketplace where bonds are bought, sold or matched is a separate system. Coffer runs one such marketplace contract, and How trading works explains it.