CBOND are unique tokens that can be utilized to help stabilize
Cheetah price around peg (1 FTM) by reducing circulating supply of Cheetah if the TWAP (time-weighted-average-price) goes below peg (1 FTM).
CBOND can be purchased only on contraction periods, when TWAP of Cheetah is below 1.
Every new epoch on contraction periods, CBONDs are issued in the amount of 3% of current Cheetah circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of Cheetah, no more bonds will be issued.
Note: CSHARE TWAP (time-weighted average price) is based on CBOND price TWAP from the previous epoch as it ends. This mean that Cheetah
TWAP is real-time and CBOND TWAP is not.
You can buy CBOND if any are available, through the Bond on Cheetah Finance, anyone can buy as many CBOND as they want as long as they have enough Cheetah to pay for them.
There is a limit amount (3% of Cheetah current circulating supply) of available CBOND 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.
CBOND 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 CBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy CBOND using Cheetah you get 2 possible ways to get your Cheetah back:
- 1.Sell back your CBOND for Cheetah while peg is between 1 - 1.1 (1 FTM) with no redemption bonus. This to prevent instant dump after peg is recovered
- 2.Sell back your CBOND for Cheetah while peg is above 1.1 (FTM) with a bonus redemption rate
CBOND TWAP (time-weighted average price) is based on Cheetah price TWAP from the previous epoch as it ends. This mean that Cheetah TWAP is real-time and CBOND TWAP is not. In other words, you can redeem CBOND for a bonus when the previous epoch's TWAP > 1.1.