What is the catch? Buying tokens at a discount sounds too good to be true.

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.

Why is the Bond ROI negative?

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.

What parameters can be adjusted?


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.

Maximum Bond Size

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.

Bond Vesting Term

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.

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