In DeFi Summer 2021, we witnessed the birth and success of OlympusDAO. Taking the premise from which Bond Protocol was also born and based on the idea of OlympusDAO. Bond Protocol brings an open bond market and provides services to other projects.
So what is Bond Protocol? What’s special about it? Let’s find out in this article!
To understand Bond Protocol, you can read more articles below:
- What is Olympus Knife (OHM, gOHM)? Overview of Cryptocurrency Olympus Dao
- What’s Interesting About Lending & Borrowing Projects on the Olympus DAO Ecosystem?
- Olympus Ecosystem: Continues to Expand with New Projects | Part 2
- What is OLM? Pros and Cons of OLM in DeFi
What is Bond Protocol?
Bond Protocol Overview
Bond Protocol is a protocol that provides a bond market (Bonding) for users. Deeply inspired and influenced by the success of OlympusDAO. Bond Protocol applies an auction mechanism to support other protocols in selling bonds or governance tokens at discounted prices.
The bond is used to incentivize users to sell assets to the protocol. The bond also has a vesting period to prevent users from selling all the discounted tokens at once to make a quick profit.
Benefits of Bonding:
- Liquidity Ownership Protocol (POL): Having sufficient depth in POL allows the protocol to ensure users that there is always sufficient liquidity during normal market activity and during periods of volatility.
- POL turns liquidity from liabilities into revenue sources: Each swap in a pool contributes a 0.3%/0.25% (Uniswap/Sushiswap) fee to the LP. With POL, because liquidity is permanently locked in the treasury, these fees provide a continuous revenue stream for the protocol.
- POL allows for more productive farming opportunities: Example Sushiswap provides Onsen programwhere protocols can list their liquidity pairs to receive SUSHI rewards. Once successfully listed, protocols can deposit their SLP tokens into the Onsen menu and SUSHI token farm.
How Bond Protocol Works
First the issuer bonds with Bond to tCreate a bond market by defining tokens get paid and receive token quote. Then user Participate in auctions to buy bonds and receive Bond Token to represent their position while their bonds are vested. After receiving Code Bond announcement can be redeemed for payment tokens after the notice period.
There are 2 types of bonds supported in Bond Protocol: term bonds and fixed-term bonds.
Bond Protocol uses a Dutch auction mechanism for the bond selling process. A Dutch auction is a form of auction in which the initial starting price of an auction target is set high and then gradually reduced in steps. The seller sets a high price for the auction target and then gradually lowers the price until someone accepts the offer. The person who accepts the price will become the winner and must pay that price to own the auction target.
Bond Protocol is also developing a product called OLM (Option liquidity Mining) to support protocols in implementing the most effective Liquidity Mining program. It helps the protocol earn additional income, attract long-term liquidity and prevent protocol token dumping. Details about this model you can read in the article “What is OLM? Pros and Cons of OLM in DeFi“.
Highlights of Bond Protocol
- User bond market and protocols.
- Sell bonds with Dutch auction mechanism.
- Provides OLM services for Liquidity Mining programs for protocols.
Development Roadmap
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Core Team
Jack Stell: Business Development Lead
- Jack graduated with a Bachelor’s degree in Economics from the University of Wisconsin-Madison in May 2023.
- In June 2023, Jack did the 2023 Virtual Insight Series for Goldman Sachs.
- Currently, Jack is Business Development Lead at Bond Protocol.
Investor
Investors
October 6, 2022: Seed round successfully raised $2.5M led by IDEO CoLab Ventures, Chapter One with participation from funds such as Alchemy, Hypersphere Ventures.
Partners
Bond Protocol is a partner of protocols such as GMX, OlympusDAO, JPEG’d, Camelot DEX, Pendle, Redacted,…
Tokenomics
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Exchanges
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Bond Protocol Information Channel
- Website: https://www.bondprotocol.finance/
- Twitter: https://twitter.com/Bond_Protocol
- Medium: https://medium.com/@Bond_Protocol
- Discord:
Summary
Bond Protocol is a project that provides a bond market for protocols and especially OLM products that will have a lot of potential for development in the future.
So I have clarified what Bond Protocol is? Bond Protocol cryptocurrency overview. Hope this article provides you with a lot of useful information and knowledge!