Bonds

Bonds

While our tokenomics are very similar to other protocols, we are going to use bonds to continuously bootstrap the treasury in order to expand our governance reach, generate revenue, and invest in this space. Making sure that inflationary pressures are never to high and every token serves a purpose and increases the value and ability of the protocol to operate effectively.

While the exact bond requirements (when bonds are available or not) are not yet completely decided upon, they will be focused upon the treasury's ability to generate revenue.

For example say that the treasury has 1 million in assets that generate 5000 USD per week, the circulating market cap is 5 million USD with 50% of the total supply in circulation, and the target return per Sobiru ERC20 token is 15-18% apy.

Based on the weekly revenue the annual revenue per token was 52 cents. While the price per token is around 10$. Giving us an apy per token of around 5.2%. Indicating a higher speculative evaluation of the token itself. In a situation like this the protocol may decide to enact a strategy similar to Olympus style inverse bonds where the protocol sells tokens on the open market to increase the supply and increase the treasury's holdings (or offer actual bonds where users exchange assets for tokens at a slight discount), the protocol takes the revenue generated compounded it back into the treasury, sells Sobiru tokens, and places the newly acquired assets into pre-approved strategies. Increasing the supply and sell pressure (through discounted tokens) to thus bring down the apy while increasing the treasury reserves. All of these actions will be controlled by smart contracts.

An inverse of this situation is also entirely possible, when the apy is very high due to potentially low prices the protocol can use revenue to buy back tokens to be used for a later date.

While this scenario is hypothetical, and may or may not come to fruition, something similar could exist. The treasury is intended to always increase in terms of assets and use the revenue generated from those assets in ways which strengthen the protocols long term positions, partnerships, and revenue generation. Often times the strategies will be much more subtle than directly selling on the market.

Bond Requirements

The requirements that must be fulfilled in order for bonds to be offered. Bonds are sold in order to increase the treasury and as a by product of this increase the revenue generated by the protocol.

*Bonds requirements are currently an ongoing design*