Bonds are unique tokens that can be utilized to help stabilize GOLD price around peg (½ AVAX) by reducing circulating supply of GOLD if the TWAP (time-weighted-average-price) goes below peg (½ AVAX).
BTOMB can be purchased only on contraction periods, when TWAP of GOLD is below 1.
Every new epoch on contraction periods, GBONDs are issued in the amount of 3% of current GOLD circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of GOLD, no more bonds will be issued.
Note: GBOND TWAP (time-weighted average price) is based on GBOND price TWAP from the previous epoch as it ends. This mean that GOLD TWAP is real-time and GBOND TWAP is not.
You can buy GBOND if any are available, through the Bond on TOMBTREASURE.FINANCE, anyone can buy as many GBOND as they want as long as they have enough GOLD to pay for them.
There is a limit amount (3% of GOLD current circulating supply) of available GBOND per epoch while on contraction periods, and are sold as first come first serve.
First and most important reason is Bonds help maintain the peg, but will not be the only measure use to keep the protocol on track, more on that on DAO Fund section.
GBOND don't have a expiration date, so you can view them as a investment on the protocol, because long term you get benefits from holding bonds.
The idea is to reward GBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy GBOND using GOLD, you get 2 possible ways to get your GOLD back:
- 1.Sell back your GBOND for GOLD while peg is between 1 - 1.1 (1 AVAX) with no redemption bonus. This to prevent instant dump after peg is recovered
- 2.Sell back your GBOND for GOLD while peg is above 1.1 (AVAX) with a bonus redemption rate
GBOND TWAP (time-weighted average price) is based on GOLD price TWAP from the previous epoch as it ends. This mean that GOLD TWAP is real-time and GBOND TWAP is not. In other words, you can redeem GBOND for a bonus when the previous epoch's TWAP > 1.1.