DBOND are unique tokens that can be utilized to help stabilize DOGGY price around peg (1 DOGE) by reducing circulating supply of DOGGY if the TWAP (time-weighted-average-price) goes below peg (1 DOGE).
DBOND can be purchased only on contraction periods, when TWAP of DOGGY is below 1.
Every new epoch on contraction periods, DBONDs are issued in the amount of 3% of current DOGGY circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of DOGGY, no more bonds will be issued.
Note: BONE TWAP (time-weighted average price) is based on DBOND price TWAP from the previous epoch as it ends. This mean that DOGGY TWAP is real-time and DBOND TWAP is not.
You can buy DBOND if any are available, through the Bond on Dog Club finance, anyone can buy as many DBOND as they want as long as they have enough DOGGY to pay for them.
There is a limit amount (3% of DOGGY current circulating supply) of available DBOND per epoch while on contraction periods, and are sold as first come first serve.
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.
DBOND don't have a expiration date, so you can view them as a investment on the protocol, because long term you get benefits from holding bonds.
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 DOGGY, you get 2 possible ways to get your DOGGY back:
- 1.Sell back your DBOND for DOGGY while peg is between 1 - 1.1 (1 DOGE) with no redemption bonus. This to prevent instant dump after peg is recovered
- 2.Sell back your DBOND for DOGGY while peg is above 1.1 (DOGE) with a bonus redemption rate
DBOND TWAP (time-weighted average price) is based on DOGGY price TWAP from the previous epoch as it ends. This mean that DOGGY 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.