πŸ“œ Bonds

Bonds

Bonds are the mechanism used to return BASED to peg when it deviates below Ethereum.

Overview

bBOND tokens activate when BASED deviates from its peg. Here's how it functions:

  • Purchase Conditions: Available when BASED is below Ethereum.
  • TWAP Constraint: No issuance if BASED's TWAP is between 1.00 and 1.0003 ETH.
  • Redemption: Available for redemption when BASED rises above the Ethereum.
    • For example, if BASED's TWAP is less than 1, exchanging BASED for bBOND will occur at a 1:1 ratio.

As BASED rises above its peg, the redemption value of bBOND becomes more lucrative to incentivize users to exchange their bBOND for BASED.

Redemption Ratio

The bBOND to BASED ratio will be 1:R, with R being determined with the formula below.

BASED Equation

Redemption Equation

BASED Equation

Ξ” = BASED TWAP Price, Ξ² = Coefficient of 0.7

bBOND Zapper

When BASED is trading over peg, users can utilize the Zapper to transition from bBOND to bSHARE in a simplified process:

bBOND ➑️ BASED ➑️ wETH ➑️ bSHARE

Why Engage with bBOND?

  • Stabilizing the Ecosystem: By purchasing bBOND during downturns, you help stabilize the BASED price and ensure its peg to Ethereum.

  • Profit Opportunities: The structured redemption mechanism means that proactive users can benefit from price fluctuations.

  • Supporting the Protocol: Engaging with bBOND means you're actively participating in the protocol's stability mechanism, fostering a more resilient ecosystem.


Remember, as with all crypto assets and mechanisms, there's a level of risk associated with buying and redeeming bonds. Always ensure you're well-informed before making any decisions.