Bonds

Profit from $BTBOND and help get $AURORA back to peg at https://brilliantfinance.io/bond

Incentives for holding $BTBOND

The idea is to reward $BTBOND buyers for helping the protocol, while also protecting the protocol from being manipulated by big players.

So after you buy $BTBOND using $BTFI, you get 2 possible ways to get your $BTFI back:

1. Sell back your $BTBOND for $BTFI while peg is between 1 - 1.1 (1 $BTFI = 1 $AURORA) with no redemption bonus. This is to prevent instant dump after peg is recovered

2. Sell back your $BTBOND for $BTFI while peg is above 1.1 (1 $BTFI = 1 $AURORA) with a bonus redemption rate

The longer you hold, the more both the protocol and you benefit from $BTBOND.

Example:

1. When BTFI = 0.8, burn 1 BTFI to get 1 BTBOND (BTBOND price = 0.8)

2. When BTFI = 1.15, redeem 1 BTBOND to get 1.105 BTFI (BTBOND price = 1.27)

So, which one is better?

If I buy $BTFI at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per $BTFI

But, if I buy $BTFI at 0.8, burn it for $BTBOND, and redeem it at 1.15, I'm getting 1.105 $BTFI* 1.15 (BTFI current price) = 1,271 (+0.47$) per $BTBOND 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 $BTFI and $BTBOND holders when needed.

When can I swap $BTBOND for a bonus?

$BTBOND TWAP (time-weighted average price) is based on $BTFI price TWAP from the previous epoch as it ends. This means that $BTFI TWAP is real-time and $BTBOND TWAP is not. In other words, you can redeem $BTBOND for a bonus when the previous epoch's TWAP > 1.1.