Bonds Mechanism
What are GBOND (Bonds)?
Bonds are unique tokens that can be utilized to help stabilize $GRAVE price around peg (1 ETH) by reducing circulating supply of $GRAVE if the TWAP (time-weighted-average-price) goes below peg (1 ETH).
When can I buy GBOND (Bonds)?
GBOND can be purchased only on contraction periods, when TWAP of $GRAVE is below 1.
Every new epoch on contraction periods, GBONDs are issued in the amount of 3% of current $GRAVE circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of $GRAVE, no more bonds will be issued.
Note: $GRAVE TWAP (time-weighted average price) is based on $GRAVE price TWAP from the previous epoch as it ends. This mean that $GRAVE TWAP is real-time and GBOND TWAP is not.
Where can I buy GBOND (Bonds)?
You can buy GBONDs if any are available, through the PIT on TombStone.Finance, anyone can buy as many GBONDs as they want as long as they have enough $GRAVE to pay for them.
There is a limit amount (3% of $GRAVE current circulating supply) of available GBONDs per epoch while on contraction periods, and are sold as first come first serve.
Why should I buy GBOND (Bonds)?
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.
GBONDs don't have a expiration date, so you can view them as a investment on the protocol, because longterm you get benefits from holding bonds.
Incentives for holding GBOND
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 $GRAVE, you get 2 possible ways to get your $GRAVE back:
Sell back your GBOND for $GRAVE while peg is between 1 - 1.1 (1 ETH) with no redemption bonus. This to prevent instant dump after peg is recovered.
Sell back your GBOND for $GRAVE while peg is above 1.1 (1 ETH) with a bonus redemption rate.
The longer you hold, the more both the protocol and you benefit from GBONDs.
Example:
When $GRAVE = 0.8, burn 1 $GRAVE to get 1 GBOND (GBOND price = 0.8)
When $GRAVE = 1.15, redeem 1 GBOND to get 1.105 $GRAVE (GBOND price = 1.27)
So, which one is better?
If I buy $GRAVE at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per $GRAVE.
But, if I buy $GRAVE at 0.8, burn it for GBOND, and redeem it at 1.15, I'm getting 1.105 $GRAVE * 1.15 ($GRAVE current price) = 1,271 (+0.47$) per GBOND 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 $GRAVE and GBOND holders when needed.
When can I swap GBOND for a bonus?
GBOND TWAP (time-weighted average price) is based on $GRAVE price TWAP from the previous epoch as it ends. This mean that $GRAVE 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.
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