2) Why do you think there will be no investors in bonds at the very beginning? There is no established fixed income instruments in the market. This $1M will form the liquidity reserves placed in the cold storages. It also will represent the bottom line of the value of our coins as they will have some sort of intrinsic value in this case.
In short, the bonds may be not attractive because they are derivatives of the InChain insurance fund but with a limited profit and additional risks.
At the same time the bonds may be interesting uder certain conditions.
At first I will review the bonds properties based on InChain financial model without the reserve fund ($1M).
The fixed income instrument is not really 'fixed' income. If the insurance fund fails (it is quite possible in the highly volatile crypto market) the income may be less than the announced coupon value. Additionally, the income has a limit and can't be more than the coupon value. And if the insurance fund succeeds with big profits they won't be sent to the bond holders but to the project itself.
In general, the bond profits:
- limited up to a certain limit
- depend heavily on the insurance fund performance (for more than 60% with 3% and 10% numbers)
- can be less than the coupon value
The bond risks:
- include hack risks (the exchanges/wallets that are under insurance)
- include insurance fund performance risks
- include InChain operation failures risks
Let's compare investing in bonds and in InChain insurance fund (or any other fund with the same portfolio)
- bonds profits are limited, fund profits are not limited
- bonds risks include hack risks and fund performance risks, fund risks include fund performance risks only
- bonds can be 3% better than fund if the fund fails and there are no hacks
In other words, when we purchase some bonds we limit our profits for the price of gaining +3% yearly ROI. And those 3% advantage is not guaranteed! As you know 3% yearly ROI for the crypto market is not meaningful at all.
I think this is not an equal exchange and investing in the fund with the same structure as InChain insurance fund is overall better than purchasing bonds.
The reserve fund can change the situation partially. If investors can check the reserve fund amount and make sure it can cover the potential insurance fund losses there may be some bond buyers. But the reserve fund is controlled by the DAO and its use is not defined yet.
At the current stage I can't make better estimations without the numbers (coupon rate and insurance premium).
Another thing that can attract bond investors is the coupon rate. For example, if it is 50% you can have many buyers I suppose.
The difficult part here is that the insurance fund should perform better than the crypto market in general because the fund should return profits in BTC, not in USD. Maintaining a good ROI in BTC is a more difficult task than USD profit I suppose.
My personal opinion is that at the current fast growing crypto market where 50% or even 100% and more early ROI is not a problem such instruments as bonds won't have a big market share.