BOND MECHANISM

WHAT ARE HEIMBONDS (Bonds)?

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

WHEN CAN I BUY HEIMBONDs (Bonds)?

HEIMBOND can be purchased only on contraction periods when TWAP of HEIMDAL's below 1. Every new epoch on contraction periods, HEIMBOND are issued in the amount of 3% of the current HEIMDAL circulating supply, with a max debt amount of 45%. This means that if bonds reach 45% of the circulating supply of HEIMDAL , no more bonds will be issued. Note: HEIMBOND TWAP (time-weighted average price) is based on HEIMDAL price TWAP from the previous epoch as it ends. This means that HEIMDAL TWAP is real-time and HEIMBOND TWAP is not.

WHERE CAN I BUY HEIMBONDs (Bonds)?

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

WHY SHOULD I BUY HEIMBONDs (Bonds)?

The First and most important reason is Bonds help maintain the peg, but will not be the only measure used to keep the protocol on track. We also have a DAO fund that will step in and buy HEIMDAL to get it back to peg. HEIMBONDs don't have an expiration date, so you can view them as an investment on the protocol because in the long term you get benefits from holding bonds. Incentives for holding HEIMBOND The idea is to reward HEIMBOND buyers for helping the protocol, while also protecting the protocol from being manipulated by big players. So after you buy HEIMBOND using HEIMDAL, you get 2 possible ways to get your HEIMDAL back: Sell back your HEIMBOND for HEIMDAL while peg is between 1 - 1.1 (1 BANANA) with no redemption bonus. This is to prevent instant dump after peg is recovered Sell back your HEIMBOND for HEIMDAL while peg is above 1.1 (1 HEIMDAL = 1 BANANA) with a bonus redemption rate The longer you hold, the more both the protocol and you benefit from HEIMBOND . Example: When HEIMDAL = 0.8, burn 1 HEIMDAL to get 1 HEIMBOND (HEIMBOND price = 0.8) When HEIMDAL = 1.15, redeem 1 HEIMBOND to get 1.105 HEIMDAL (HEIMBOND price = 1.27)

So, which one is better?

If I buy HEIMDAL at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per HEIMDAL But, if I buy HEIMDAL at 0.8, burn it for HEIMBOND , and redeem it at 1.15, I'm getting 1.105 HEIMDAL * 1.15 (HEIMDAL current price) = 1,271 (+0.47$) per HEIMBOND redeemed. But what if getting back to peg is taking too long? We are going to adjust our use cases, to have different behaviours on contraction and expansion periods to benefit HEIMDAL and HEIMBOND holders when needed.

WHEN CAN I SWAP HEIMBOND FOR A BONUS?

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