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Bonds Mechanism

What are NBOND (Bonds)?

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

When can I buy NBOND (Bonds)?

NBOND can be purchased only on contraction periods, when TWAP of NAVA is below 1.
Every new epoch on contraction periods, NBOND are issued in the amount of 3% of current NAVA circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of NAVA, no more bonds will be issued.
Note: NBOND TWAP (time-weighted average price) is based on NAVA price TWAP from the previous epoch as it ends. This mean that NAVA TWAP is real-time and NBOND TWAP is not.

Where can I buy NBOND (Bonds)?

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

Why should I buy NBOND (Bonds)?

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 NAVADAO Fund section here.
NBOND 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 NBOND

The idea is to reward NBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy NBOND using NAVA, you get 2 possible ways to get your NAVA back:
  1. 1.
    Sell back your NBOND for NAVA while peg is between 1 - 1.1 REI with no redemption Boardroom. This to prevent instant dump after peg is recovered
  2. 2.
    Sell back your NBOND for NAVA while peg is above 1.1 REI with a Boardroom redemption rate
The longer you hold, the more both the protocol and you benefit from Nbond.
Example:
  1. 1.
    When NAVA = 0.8REI, burn 1 NAVA to get 1 NBOND (NBOND price = 0.8REI)
  2. 2.
    When NAVA = 1.15REI, redeem 1 NBOND to get 1.105 NAVA (NBOND price = 1.27075REI)
So, which one is better?
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 NAVA and NBOND holders when needed.

When can I swap NBOND for a Boardroom?

BOND TWAP (time-weighted average price) is based on NAVA price TWAP from the previous epoch as it ends. This mean that NAVA TWAP is real-time and NBOND TWAP is not. In other words, you can redeem NBOND for a Boardroom when the previous epoch's TWAP > 1.1.
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What are NBOND (Bonds)?
When can I buy NBOND (Bonds)?
Where can I buy NBOND (Bonds)?
Why should I buy NBOND (Bonds)?
When can I swap NBOND for a Boardroom?