What are HBOND?
HBOND (HERMES) Bond are unique tokens that can be utilized to help stabilize HERMES price around peg (1 HERMES = 1 AVAX) by reducing circulating supply of HERMES if the TWAP (time-weighted-average-price) goes below peg.
When can I buy HBOND?
HBOND can be purchased only on contraction periods, when TWAP of HERMES is below 1.
Every new epoch on contraction periods, HBONDs are issued in the amount of 3% of current HERMES circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of HERMES, no more bonds will be issued.
Note: HBOND TWAP (time-weighted average price) is based on HERMES price TWAP from the previous epoch as it ends. This mean that HERMES TWAP is real-time and HBOND TWAP is not.
Where can I buy HBOND?
You can buy HBONDs if any are available, through TARTARUS, anyone can buy as many HBONDs as they want as long as they have enough HERMES to pay for them.
There is a limit amount (3% of HERMES current circulating supply) of available HBOND per epoch while on contraction periods, and are sold as first come first serve.
Why should I buy HBOND ?
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. We also have a COMMUNITY fund which will step in and buy HERMES to get it back to peg.
HBOND don't have a expiration date, so you can view them as a investment on the protocol, because longterm you get benefits from holding bonds
Incentives for holding HBOND
The idea is to reward HBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy HBOND using HERMES, you get 2 possible ways to get your HERMES back:
- 1.Sell back your HBOND for HERMES while peg is between 1 - 1.1 (1 HERMES = 1AVAX) with no redemption bonus. This to prevent instant dump after peg is recovered
- 2.2.Sell back your HBOND for HERMES while peg is above 1.1 (1 HERMES = 1 AVAX) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from HBOND.
- 1.When HERMES = 0.8, burn 1 HERMES to get 1 HBOND (HBOND price = 0.8)
- 2.When HERMES = 1.15, redeem 1 HBOND to get 1.105 HERMES (HBOND price = 1.27)
So, which one is better?
If I buy HERMES at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per HERMES
But, if I buy HERMES at 0.8, burn it for HBOND, and redeem it at 1.15, I'm getting 1.105 HERMES * 1.15 (HERMES current price) = 1,271 (+0.47$) per HBOND redeemed.
But what if getting back to peg is taking too long ?
We are going to adjust our use cases, to have different behaviors on contraction and expansion periods to benefit HERMES and HBOND holders when needed.
When can I swap HBOND for a bonus?
HBOND TWAP (time-weighted average price) is based on HERMES price TWAP from the previous epoch as it ends. This mean that HERMES TWAP is real-time and HBOND TWAP is not. In other words, you can redeem HBOND for a bonus when the previous epoch's TWAP > 1.1