Application Scenarios:Institutional Asset Management

Background and Challenges

Institutional investors such as pension funds, insurance companies, and sovereign wealth funds face multiple challenges:

• Traditional bond investments lock up large amounts of capital, limiting strategy flexibility
• Declining yields make it difficult to meet investment targets
• There is an inherent contradiction between liquidity and yield
• Risk management needs to be refined, but traditional tools are insufficient

IOST 3.0 RWA Solution

The IOST 3.0 bond split engine provides institutional investors with innovative asset management solutions:

1. Capital Efficiency Multiplication:

   • Separates large bond investments into P-Bonds and Y-Bonds
   • Retains Y-Bonds to secure stable income
   • Releases portion of funds (P-Bonds) for other investments

2. Liquidity Management Innovation:

   • Stakes P-Bonds with different maturity times to generate PB-USD
   • Builds cash flows that precisely match liability structures
   • Provides liquidity buffers for emergency situations

3. Refined Risk Control:

   • Separate risk management for principal (P-Bond) and yield (Y-Bond)
   • Multi-level hedging strategies
   • Advanced risk analysis tools

Implementation Process

1. Institution brings bond assets into IOST through the asset bridge system
2. Uses Liquidity Engine to separate bonds into P-Bonds and Y-Bonds
3. Holds Y-Bonds to obtain stable yield stream
4. P-Bonds according to institutional needs:
   • Partially stake to generate PB-USD for short-term liquidity
   • Reinvest in higher-yield opportunities
   • Use as collateral for additional strategies
5. Optimize overall portfolio return while maintaining risk control