Bonds Mechanism
What are SBOND (Bonds)?
Bonds are unique tokens that can be utilized to help stabilize SPECTER price around peg (1 FTM) by reducing circulating supply of SPECTER if the TWAP (time-weighted-average-price) goes below peg (1 FTM).
When can I buy SBOND (Bonds)?
SBOND can be purchased only on contraction periods, when TWAP of SPECTER is below 1.
Every new epoch on contraction periods, SBONDs are issued in the amount of 3% of current SPECTER circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of SPECTER , no more bonds will be issued.
Note: SBOND TWAP (time-weighted average price) is based on SPECTER price TWAP from the previous epoch as it ends. This mean that SPECTER TWAP is real-time and SBOND TWAP is not.
Where can I buy SBOND (Bonds)?
You can buy SBONDs if any are available, through the CRYPT on specterfinance.xyz, anyone can buy as many SBONDs as they want as long as they have enough SPECTER to pay for them.
There is a limit amount (3% of SPECTER current circulating supply) of available SBONDs per epoch while on contraction periods, and are sold as first come first serve.
Why should I buy SBOND (Bonds)?
SBONDs 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.
Incentives for holding SBOND
The idea is to reward SBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy SBOND using SPECTER , you get 2 possible ways to get your SPECTER back:
Sell back your SBOND for SPECTER while peg is between 1 - 1.1 (1 FTM) with no redemption bonus. This to prevent instant dump after peg is recovered
Sell back your SBOND for SPECTER while peg is above 1.1 (1FTM) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from Sbonds.
Example:
When SPECTER = 0.8, burn 1 SPECTER to get 1 SBOND (SBOND price = 0.8)
When SPECTER = 1.15, redeem 1 SBOND to get 1.105 SPECTER (SBOND price = 1.27)
So, which one is better?
If I buy SPECTER at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per SPECTER
But, if I buy SPECTER at 0.8, burn it for SBOND, and redeem it at 1.15, I'm getting 1.105 SPECTER * 1.15 (SPECTER current price) = 1,271 (+0.47$) per SBOND redeemed.
But what if getting back to peg is taking too long ?
We are going to adjust our use cases, to have different behaviors on contraction and expansion periods to benefit SPECTER and SBOND holders when needed.
When can I swap SBOND for a bonus?
SBOND TWAP (time-weighted average price) is based on SPECTER price TWAP from the previous epoch as it ends. This mean that SPECTER TWAP is real-time and SBOND TWAP is not. In other words, you can redeem SBOND for a bonus when the previous epoch's TWAP > 1.1.
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