BONDs Redemption Explanation

2 min readMar 28, 2021

Are you a BONDs (bBDO) #hodlers? Then this article is for you, it will help you to maximize profits from BONDs!!

We will be in expansion very soon so please take note the following:

The first expansion after contraction

10% TAX on your BONDs redemption, basically it means if you’re supposed to redeem 3k BONDs, you will be left with 2.7k BONDs, accepting a loss of 300 (10% tax).

The second consecutive expansion

5% TAX on your BONDs redemption

Wondering how premium BONDs percentages work?

When TWAP ends in 1.04 for example, the premium on bonds will be 4%.

1.05 = 5%

1.069 = 6.9%

1.08 = 8%

.. .and so on.

Example scenario ~ Past 1 Epoch: TWAP at 1.05

The first expansion (10% Tax)

You have 2500 BONDs, hence 2500 x 1.05 = 2625 BDOs

Since you have the 10% Tax = 2625 -262.50 = 2362.50 BDOs -> Less than your original BONDs amount.

So you are giving up your premium and accepting a loss if you redeem too early! Hold on and the TWAP will go up to 1.1 or higher in the next few epochs and redeem for delicious BONDs!!

Please note that BONDs are limited to redeem per Epoch as it makes the pegging down gentler.

The limit of BONDs redemption per expansion is the same speed as BDO expansion speed, which at current Market cap, around 1%.

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