Bond Pricing
Bond Pricing
TendieSwap Bonds are dynamically priced directly proportional to demand, and inversely proportional to time. As such, Bond pricing is determined by three things:
The price of the input LP token used to purchase the Bond
The price of the output token (i.e. $TENDIES)
The time since the last Bond was purchased
Demand for a specific Bond
These factors combine to determine a discount on the reward token ($TENDIES) relative to the market price. Bonds start out at a specific discount, set by TendieSwap.
Over time, that discount will increase if the price of the input LP tokens (#1) and the price of the output token (#2) has no change in value, to make the Bonds more attractive to purchase.
When you purchase a Bond, the entire amount of the tokens you purchase will be discounted by the amount shown at the time of purchase.
How Discount Amounts Change
If the price of the output token ($TENDIES) increases, and the price of the LP token(s) decreases or stays the same, the discount of the Bond will increase, since the $TENDIES are worth more, and the input token(s) is worth the same or less.
If the price of $TENDIES decreases and the price of the LP token(s) increases or stays the same, the discount of the Bond will decrease, since $TENDIES are worth less and the input LPs are worth the same or more.
Negative Bond Values
If the Bond discount is negative, purchasing the BOND NFT will not return $TENDIES at a price lower than the current market rate. Users can still buy Bonds and receive $TENDIES and their NFT, which helps to build depth in the liquidity that is beneficial to the project over the longer term, but must recognise that they are buying at a price higher than the current market value.
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