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Bonds Mechanism

What are DBOND (Bonds)?

Bonds are unique tokens that can be utilized to help stabilize DIBS price around peg (1000 DIBS = 1 BNB) by reducing circulating supply of DIBS if the TWAP (time-weighted-average-price) goes below peg (1000 DIBS = 1 BNB).

When can I buy DBOND (Bonds)?

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

Where can I buy DBOND (Bonds)?

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

Why should I buy DBOND (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. We also have a DAO fund which will step in and buy DIBS to get it back to peg.
DBONDs don't have a expiration date, so you can view them as a investment on the protocol, because longterm you get benefits from holding bonds.

Incentives for holding DBOND

The idea is to reward DBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy DBOND using DIBS, you get 2 possible ways to get your DIBS back:
  1. 1.
    Sell back your DBOND for DIBS while peg is between 1 - 1.1 (1000 DIBS = 1 BNB) with no redemption bonus. This to prevent instant dump after peg is recovered
  2. 2.
    Sell back your DBOND for DIBS while peg is above 1.1 (1000 DIBS = 1 BNB) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from DBOND.
Example:
  1. 1.
    When DIBS = 0.8, burn 1 DIBS to get 1 DBOND (DBOND price = 0.8)
  2. 2.
    When DIBS = 1.15, redeem 1 DBOND to get 1.105 DIBS (DBOND price = 1.27)
So, which one is better?
If I buy DIBS at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per DIBS
But, if I buy DIBS at 0.8, burn it for DBOND, and redeem it at 1.15, I'm getting 1.105 DIBS * 1.15 (DIBS current price) = 1,271 (+0.47$) per DBOND 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 DIBS and DBOND holders when needed.

When can I swap DBOND for a bonus?

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