Based Bond Token

When the price of BASED is below 1.01 TWAP , bonds will be available to purchase

In previous seigniorage and tomb fork protocols, bonds have historically been an ineffective way to bring a protocol back to peg. Based Money Finance is introducing new mechanics to fundamentally change how the market views BOND tokens.

Bond Liquidity

The first thing that Based Money Finance will do to incentivize the BOND token, is to simply allow the token to be liquid. The team will create initial liquidity pools for the BOND token

• BBOND/BASED LP

• BBOND/USDbC LP

Allowing the bond to be liquid will allow people to enter and exit their bond position via swaps, and create arbitrage opportunities.

These BOND LP's will also be incentivized in the BSHARE farms, to further deepen bond liquidity. Bonds will be incentivized in the future as the main token in participating in further Based Money Finance development

Bond Rebase (This section subject to change)

The second mechanic is a unique feature to the BOND token. Bond supply will rebase negatively, every epoch for .25% This means that every 6 hours, the supply of the BBOND token will decrease by .25%

This includes the balances of BBOND held in liquidity. Since the BBOND token is liquid, the BBOND token will always maintain it's price before rebase, due to Uniswap's classic X*Y=K constant product formula.

Example: BBOND/USDbC liquidity is 1000 BBOND/ 1000 USDbC. 1 BBOND = 1USDbC Rebase occurs and the LP now has a balance of 997.5 BBOND / 1000 USDbC. Since the balance of USDbC never changed, 997.5 BBOND is still worth what 1000 BBOND was prior to the rebase. After a few rebases, it is now profitable for a user to swap their BBOND to BASED on a dex, then immediately purchase more BBOND's from the treasury. This process burns BASED, and turns a profit for the user. Total supply of BASED decreases over time and allows for BASED to more easily reach it's peg target, with little to no additional capital needed from the ecosystem.