Bonding enables investors to buy $ETF for 30% cheaper than market price but comes with 5 days vesting before being claimable.
Acquiring ETF
Investors Bond to acquire $ETF directly from the treasury. $ETF can be bonded at 30% discount compared to the market price. This offers an opportunity for arbitrage as a proxy for treasury growth.
Vesting -> Timing -> Dilution
Vesting Period
Bonds have a 5-day vesting period. Post-purchase, investors must wait for this duration before they can claim their $ETF, ensuring controlled distribution.
Random times
We will be opening “LIMITED” bonds(25-50k$) at random times throughout the day. To be able to purchase discounted bonds, you are required to stay alert throughout the day. This is our strategy to keep users participating throughout.
Dilution control
When users claim a vested bond, a debase function call is triggered to reduce the supply throughout LPs and non stakers, which reduces the bond dilution and protects stakers!
Debase rate control
In the early stage, we’ll keep the debase rate lower as we want to distribute more supply to early participants. Soon it will increase and at some point, bonding will be net neutral for the overall supply.
Bonding Dynamics: Balancing Incentives for Sustainable Growth
In bonds in other treasury-backed protocols, LP bonds are good incentives as they force buyers to buy and LP to bond, which usually causes an early price pump. However, this is unhealthy for the overall project growth as these early bonders can sell for big profit and make it net negative for the protocol.
Here, we want more control so we only need ETH bonds. That being said, we will acquire POL by ourselves. When profitable bonders or stakers take profits and the price goes below the previous bond price. We’ll slowly buy back with the $ETH acquired and add liquidity to our $ETF - $ETH pair.
Conclusion 🤝
As a result, our LP acquisition will be at healthy levels and ensure more longevity for the project as well as disincentivizing profitable bonders from selling. This way, bond, buy, or stake, users will ultimately work for the benefit of the ETHTrustFund $ETF ecosystem and its longevity!
