Digital Bonds: The Role of Costs and Document Information on Trading Volume by Shufan Ma, Bertram I. Steininger, Zan Yang :: SSRN

This paper examines digital bonds issued on blockchain platforms, classifying them as native or non-native (tokenized) based on issuance architecture. Using a dataset of 7,719 transactions in tokenized treasury products backed by U.S. government securities, we analyze how transaction costs, management fees, macroeconomic conditions, and regulatory structures affect trading volume. Higher transaction costs are associated with lower trading activity, while management fees exhibit a positive association conditional on documentation quality. To measure disclosure content, we apply large language models to quantify the informativeness of legal, financial, and technological product documentation. Financial disclosures increase trading volume, while legal disclosures reduce it. Interaction effects show that financial information attenuates investor sensitivity to management fees, whereas legal and technological clarity amplify it. Instrumental variable estimation, placebo simulations, and heterogeneity analysis confirm the robustness of the results. Our findings contribute to the literature on digital finance and tokenized assets by identifying how cost structures and documentation quality jointly influence participation in decentralized fixed-income markets.