Tokens purchased through a bond are not released to the bonder all at once. Instead, they vest linearly over time. This prevents the bonder from selling their tokens all at once for a quick profit.
At times, you'll see that the bond discount turns negative, meaning you'd pay a premium from the market in order to bond. You should not bond during this time, as you can buy the same tokens but at a cheaper price from the market. As time goes on, the discount will slowly increase, until it reaches a positive discount again. The negative discount can be caused by different factors:
- 1.High demands for bonds: Bonds offer users the ability to purchase tokens at a market discount. However, this price is dependent on the demands of bonds. When there is a high demand, the bond price goes up, and vice versa. The demand may be so high that it may cause the bond price to inflate above the market price.
- 2.Sharp decreases in price: At times, when a token experiences a sharp decrease in price, it takes time for the bond price to decrease to match the new token price. This causes a temporary negative discount, until the bond price matches the market value again.
BCV directly affects the bond price - the higher the BCV, the higher the bond price. As a higher bond price makes bonds less attractive, the protocol can adjust this value to tune the bond capacity.
This controls the maximum amount of reward tokens a user can purchase through a bond. It is set as a percentage of the total supply and typically ranges between 0.03-0.05% of the total supply.
A bond vests linearly to the bonder over a length of time, called the bond vesting term. This means the bonder can claim a portion of the reward tokens each day, with all rewards being claimable at the end of the term.