🤝Bond Mechanism

What are ABOND (Bonds)?

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

When can I buy ABOND (Bonds)?

ABONDs can be purchased only on contraction periods, when TWAP of ATomb is below 1.0. Every new epoch on contraction periods, ABONDs are issued in the amount of 3% of current ATOMB circulating supply, with a max debt amount of 45%.

This means that if bonds reach 45% of the circulating supply of ATomb, no more bonds will be issued.

Where can I buy ABOND (Bonds)?

You can buy ABONDs if any are available, through our Arbitomb site. Anyone can buy as many ABONDs as they want, as long as they have enough ATomb to pay for them.

Why should I buy ABOND (Bonds)?

The first and most important reason is that bonds help maintain the peg, but will not be the only measure used to keep the protocol on track. We also have a Treasury fund that will step in and buy ATomb to get it back to peg. Abonds can be purchased below the market price of ATOMB and redeemed once the peg is bad to >1.0

Incentives for holding ABOND

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

So after you buy ABOND using ATomb, you get 2 possible ways to get your ATomb back:

•Sell back your ABOND for ATomb while peg is between 1 - 1.1 with no redemption bonus. This is to prevent instant dump after peg is recovered.

•Sell back your ABOND for ATomb while peg is above 1.1 with a bonus redemption rate.

The longer you hold, the more you as well as the protocol benefit from ABOND.

Example:

•When ATomb = 0.8, burn 1 ATomb to get 1 ABOND (ABOND price = 0.8)

•When ATomb = 1.15, redeem 1 ABOND to get 1.105 ATomb (ABOND price = 1.27)

So, which one is better? If I buy ATomb at 0.8, and hold it until 1.15 and then sell, you’re getting +0.35$ per ATomb. But, if you buy ATomb at 0.8, burn it for ABOND, and redeem it at 1.15, you’re getting 1.105 ATomb * 1.15 (ATomb current price) = 1,271 (+0.47$) per ABOND redeemed.