Simply, Bonding allows you to buy TEA at a lower cost. In return for selling your stable coins or LP tokens or NFTs, the protocol will sell you TEA at a discount. The idea here is that bonds will give you a greater amount of TEA than you would have received if you had bought on the market and then staked. "How much more” will be determined by how many bonds are already available.

Bonding is the secondary value accrual strategy of TeaDAO.

Bonding allows TeaDAO to acquire its own liquidity and other reserve assets such as BUSD by selling TEA at a discount in exchange for these assets. The protocol quotes the bonder with terms such as the bond price, the amount of TEA tokens entitled to the bonder, and the vesting term.
Your bond is not paid out the full amount only at maturity, but rather it is linearly vested, meaning that you get the proceeds from the bond handed back to you during the duration of the bond. This means that a user of TeaDAO can effectively bond, claim quickly and then stake the proceeds for even more implicit yield.

Bonding is an active, short-term strategy.

The price discovery mechanism of the secondary bond market renders bond discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

Bonding allows TeaDAO to accumulate its own liquidity.

We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since TeaDAO becomes its own market, on top of providing additional certainty for TEA investors, the protocol accrues more and more revenue from LP rewards, bolstering our treasury.
Copy link
On this page