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Bonding

What is bonding?

Bonding(1,1) is the secondary value accrual strategy of Values. It allows Values to acquire its own liquidity and other reserve assets such as LUSD by selling VALUES token at a discount in exchange for these assets. The protocol quotes the bonder with terms such as the bond price, the amount of VALUES token tokens entitled to the bonder, and the vesting term. The bonder can claim some of the rewards (VALUES tokens) as they vest, and at the end of the vesting term, the full amount will be claimable.
Bonding is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders bond discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.
Bonding allows Values to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since Values becomes its own market, on top of additional certainty for VALUES token investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.

(1,1) Bonding

  • 1,1 Bonding is the process of buying regular 1,1 Bonds
  • Users can swap selected tokens (usually stable coins like DAI and USDC) or LP pairs directly with the Protocol in exchange for discounted VALUES token tokens.
  • This allows the Protocol to build reserves of stablecoins which help grow the project and allow us to offer attractive APYs.
  • In return, Bonders will receive a linearly vested supply of discounted VALUES tokens which can be redeemed and staked or traded.

(4,4) Bonding

4,4 Bonding is very similar to (1,1) bonding with some differences
  • The rewards for a 4,4 bonds are paid in sVALUES(staked VALUES tokens) instead of VALUES tokens
  • Complete Value of 4,4 bond is staked, not separated into epochs
  • Your rewards compound as they are vested, meaning you don't have to stake them, after claiming them
  • Bonds have a vesting period of 5 days and you can claim at the end.
  • The percentage shown in sidebar is ROI (Return of Investment) after 5 days and not discount.
    • Breakdown of percentage is show on the bonds page
    • In below example ROI is 12.28 = 0.70% (discount) + 11.58% (Rebase rewards on complete amount)
Note: As you get sVALUES, you get rebase rewards even if you don't claim them.
Claiming just moves sVALUES from contract to your total staked amount.

Can I purchase multiple bonds?

Yes, but your vesting period will reset to 5 days after the most recent purchase.