Bonding
Last updated
Last updated
Bonding is the process of trading an asset or LP share to the protocol for UPS. The protocol specifies the tentative ROI of bonding, the amount of UPS participants will receive and a vesting period for the trade. In a optimal scenario, participants trade their asset or LP share for more UPS tokens.
Bonding is for a 5 day fixed period. Each different type of bond you can hold one of. if you buy more than one bond of the same variety, you will forfeit the previous yield you had locked in and reset the time to maturity to 5 days. A bond portfolio can look like this in simplest terms.
One bond of UPFI variety, bought when UPS is worth $1000 UPFI. With a 5% discount on the bond, you will be paying 950 UPFI for the opportunity to own $1000 UPFI of UPS at maturity.
Furthermore, 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 UPFI Network can effectively bond, claim quickly and then stake the proceeds for even more implicit yield.
UPS-USDC LP Bonding allows you to contribute liquidity to the UPS-USDC pool on Raydium in return for LP shares, which can then be used to mint UPS at a discount.
UPFI Network has bond ceilings for all our bond pairs. These are created to limit the amount of inflation UPS can experience in a given time frame. Bond ceilings are good for the sustainable growth of our platform and are a needed feature.
