💎Bond Mechanism

What are EBOND (Bonds)?

Bonds are unique tokens that can be utilized to help stabilize EMP price around peg (4,000 EMP = 1 ETH) by reducing circulating supply of EMP if the TWAP (time-weighted-average-price) goes below peg (4,000 EMP = 1 ETH).

When can I buy EBOND (Bonds)?

EBOND can be purchased only on contraction periods, when TWAP of EMP is below 1.0. Every new epoch on contraction periods, EBONDs are issued in the amount of 3% of current EMP circulating supply, with a max debt amount of 45%.

This means that if bonds reach 45% of circulating supply of EMP, no more bonds will be issued.

Note: EBOND TWAP (time-weighted average price) is based on EMP price TWAP from the previous epoch as it ends. This mean that EMP TWAP is real-time and EBOND TWAP is not.

Where can I buy EBOND (Bonds)?

You can buy EBONDs if any are available, through our emp.money site. Anyone can buy as many EBONDs as they want, as long as they have enough EMP to pay for them.

There is a limited amount (3% of EMP's current circulating supply) of available EBONDs per epoch while on contraction periods, and they are sold on a first come first serve basis.

Why should I buy EBOND (Bonds)?

The first and most important reason is that bonds help maintain the peg, but will not be the only measure used to keep the protocol on track. We also have a Treasury fund which will step in and buy EMP to get it back to peg.

EBONDs don't have an expiration date, so you can view them as an investment in the protocol, because long term you get benefits from holding bonds.

Incentives for holding EBOND

The idea is to reward EBOND buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.

So after you buy EBOND using EMP, you get 2 possible ways to get your EMP back:

•Sell back your EBOND for EMP while peg is between 1 - 1.1 with no redemption bonus. This is to prevent instant dump after peg is recovered.

•Sell back your EBOND for EMP while peg is above 1.1 with a bonus redemption rate.

The longer you hold, the more both the protocol and you benefit from EBOND.

Example:

•When EMP = 0.8, burn 1 EMP to get 1 EBOND (EBOND price = 0.8)

•When EMP = 1.15, redeem 1 EBOND to get 1.105 EMP (EBOND price = 1.27)

So, which one is better? If I buy EMP at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per EMP. But, if I buy EMP at 0.8, burn it for EBOND, and redeem it at 1.15, I'm getting 1.105 EMP * 1.15 (EMP current price) = 1,271 (+0.47$) per EBOND 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 EMP and EBOND holders when needed.

When can I swap EBOND for a bonus?

EBOND TWAP (time-weighted average price) is based on EMP price TWAP from the previous epoch as it ends. This means that EMP TWAP is real-time and EBOND TWAP is not. In other words, you can redeem EBOND for a bonus when the previous epoch's TWAP > 1.1.