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