Contractions & $BTBOND

To further illustrate why the longer you hold $BTBOND the more profitable it is, let's take an initial $1000 investment into consideration. In this example, say this $1000 is used to buy $BTFI when $BTFI TWAP is 0.95 and then swapped for $BTBOND. If these $BTBOND are redeemed when: -$BTFI TWAP is 1.5, your investment would now be worth $1421. -$BTFI TWAP is 2, your investment would now be worth $1789. -$BTFI TWAP is 3, your investment would now be worth $2526. -$BTFI TWAP is 5, your investment would now be worth $4000.

1. "I expected $BTBOND to be issued in the pit, but there is none. Why?"

There is a balanced state "at peg" when $BTFI's TWAP is between 1.00 and 1.01, and this means there is neither contraction nor inflation.

2. "When can I swap $BTBOND back to $BTFI?"

You can swap it back again when the following two criteria are met:

1. $BTFI TWAP is above peg and

2. There is enough in the treasury to cover the redemption.

3. "Is $BTBOND right for me?"

Like anything else in crypto, obtaining $BTBOND is not risk-free. Just like in the real world, you are purchasing debt from the protocol with the expectation that you will be redeemed at a premium in the future. To date, this has occurred after all contractions, but past performance does not guarantee the same future outcomes. $BTBOND is ideal for those with a medium to long-term time preference, as it incentivizes holding in exchange for potentially extremely lucrative rewards. If you are looking for a quick flip or have short-term time preference, $BTBOND may not be the right investment option for you.