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Why need Bonds in Mechanism?

What are BDOGE (Bonds)?

Bonds are unique tokens that can be utilized to help stabilize FDOGE price around peg (1 FTM) by reducing circulating supply of FDOGE if the TWAP (time-weighted-average-price) goes below peg (1 FTM).

When can I buy BDOGE (Bonds)?

BDOGE can be purchased only on contraction periods, when TWAP of FDOGE is below 1.
Every new epoch on contraction periods, BDOGE are issued in the amount of 3% of current FDOGE circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of FDOGE, no more bonds will be issued.
Note: BDOGE TWAP (time-weighted average price) is based on FDOGE price TWAP from the previous epoch as it ends. This mean that FDOGE TWAP is real-time and BDOGE TWAP is not.

Where can I buy BDOGE (Bonds)?

You can buy BDOGE if any are available, through the Bonds on Fdoge.finance, anyone can buy as many BDOGE as they want as long as they have enough FDOGE to pay for them.
There is a limit amount (3% of FDOGE current circulating supply) of available BDOGE per epoch while on contraction periods, and are sold as first come first serve.

Why should I buy BDOGE (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, more on that on DAO Fund section here.
BDOGE don't have a expiration date, so you can view them as an investment on the protocol, because long-term you get benefits from holding bonds.

Incentives for holding BDOGE

The idea is to reward BDOGE buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
Therefore, after you buy BDOGE using FDOGE, you get 2 possible ways to get your FDOGE back:
1. Sell back your BDOGE for FDOGE while peg is between 1 - 1.1 (1 FTM) with no redemption bonus. This to prevent instant dump after peg is recovered
2. Sell back your BDOGE for FDOGE while peg is above 1.1 (1FTM) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from BDOGE .
Example:
1. When FDOGE = 0.8, burn 1 FDOGE to get 1 BDOGE (BDOGE price = 0.8)
2. When FDOGE = 1.15, redeem 1 BDOGE to get 1.105 FDOGE (BDOGE price = 1.27)
So, which one is better?
If I buy FDOGE at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per FDOGE
But, if I buy FDOGE at 0.8, burn it for FDOGE , and redeem it at 1.15, I'm getting 1.105 FDOGE * 1.15 (FDOGE current price) = 1,271 (+0.47$) per BDOGE 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 FDOGE I swap BDOGE for a bonus?
BDOGE TWAP (time-weighted average price) is based on FDOGE price TWAP from the previous epoch as it ends. This mean that FDOGE TWAP is real-time and BDOGE TWAP is not. In other words, you can redeem BDOGE for a bonus when the previous epoch's TWAP > 1.1.