Bonds
What are ABOND?
ABONDs are unique tokens that can be utilized to help stabilize ARGOS price around peg (1 ARGOS = 1 JOE) by reducing the circulating supply of ARGOS if the TWAP (time-weighted-average-price) goes below peg.
When can I buy ABOND?
ABOND can be purchased only on contraction periods, when TWAP of ARGOS is below 1.
Every new epoch on contraction periods, ABONDs are issued in the amount of 3% of current ARGOS circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of ARGOS, no more bonds will be issued.
Note: ABOND TWAP (time-weighted average price) is based on ARGOS price TWAP from the previous epoch as it ends. This means that ARGOS TWAP is real-time and ABOND TWAP is not.
Where can I buy ABOND?
You can buy ABONDs if any are available, through Bonds page, anyone can buy as many bonds as they want as long as they have enough ARGOS to pay for them.
There is a limit amount (3% of ARGOS current circulating supply) of available ABOND per epoch while on contraction periods, and are sold as first come first serve.
Why should I buy ABOND ?
The first and most important reason is Bonds help maintain the peg, but will not be the only measure used to keep the protocol on track. We also have a COMMUNITY fund that will step in and buy ARGOS to get it back to peg.
ABOND don't have an expiration date, so you can view them as an investment on the protocol, because longterm you get benefits from holding bonds
Incentives for holding ABOND
The idea is to reward ABOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy ABOND using ARGOS, you get 2 possible ways to get your ARGOS back:
Sell back your ABOND for ARGOS while peg is between 1 - 1.1 (1 ARGOS = 1 JOE) with no redemption bonus. This is to prevent instant dump after peg is recovered
Sell back your ABOND for ARGOS while peg is above 1.1 (1 ARGOS = 1 JOE) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from ABOND.
Example:
When ARGOS = 0.8, burn 1 ARGOS to get 1 ABOND (ABOND price = 0.8)
When ARGOS = 1.15, redeem 1 ABOND to get 1.105 ARGOS (ABOND price = 1.27)
So, which one is better?
If I buy ARGOS at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per ARGOS
But, if I buy ARGOS at 0.8, burn it for ABOND, and redeem it at 1.15, I'm getting 1.105 ARGOS * 1.15 (ARGOS current price) = 1,271 (+0.47$) per ABOND 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 ARGOS and ABOND holders when needed.
When can I swap ABOND for a bonus?
ABOND TWAP (time-weighted average price) is based on ARGOS price TWAP from the previous epoch as it ends. This means that ARGOS TWAP is real-time and ABOND TWAP is not. In other words, you can redeem ABOND for a bonus when the previous epoch's TWAP > 1.1
Mechanism
ABOND (bond tokens) are available for purchase when ARGOS falls below the peg. If ARGOS TWAP is between 1.00 and 1.01, neither ABOND nor ARGOS will be issued.
e.g. if ARGOS TWAP < 1, exchange ARGOS for ABOND will be in a 1:1 ratio.
ABOND (bond tokens) are available for redemption when ARGOS goes above the 1 JOE peg.
To encourage the redemption of ABOND for ARGOS when ARGOS TWAP > 1.1 and incentivize users to redeem at a higher price, ABOND redemption will be more profitable with a higher ARGOS TWAP value, of which ABOND to ARGOS ratio will be 1:R, where R can be calculated in the formula as shown below:
R=1+[(ARGOS(twapprice)−1)∗coeff)]
Where coeff = 0.7
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