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A brief description on $BETH
Contract Address - 0xEbe57d1fB13A4125f895a412f0172D8557989646
What are BETH(Bonds)?
Bonds are unique tokens that can be utilized to help stabilize AETH price around peg (1 ETH) by reducing circulating supply of AETH if the TWAP goes below peg.
BETH can be purchased only on contraction periods, when TWAP of AETH is below 1. Every new epoch on contraction periods, BETH are issued in the amount of 3% of current BETH circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of BETH, no more bonds will be issued.Note: BETH TWAP (time-weighted average price) is based on AETH price TWAP from the previous epoch as it ends. This mean that AETH TWAP is real-time and BETH TWAP is not.
You can buy BETH if any are available, through the BONDS on Atlantis.fi, anyone can buy as many BETH as they want as long as they have enough AETH pay for them. There is a limited amount (3% of AETH current circulating supply) of available BETH per epoch while on contraction periods, and are sold as first come first serve.
First and most important reason is Bonds help maintain the peg, but will not be the only measure use to keep the protocol on track. BETH doesn't have an expiration date, so you can view them as an investment on the protocol, because long term you can get benefits from holding bonds.
Incentives for holding BETH
The idea is to reward BETH buyers for helping the protocol, while also protecting the protocol from being manipulated from big players. So after you buy BETH using AETH , you get 2 possible ways to get your AETH back:
- 1.Sell back your BETH for AETH while peg is between 1 - 1.1 (1 ETH) with no redemption bonus. This to prevent instant dump after peg is recovered
- 2.Sell back your BETH for AETH while peg is above 1.1 (1.1 ETH) with a bonus redemption rate
The longer you hold, the more both the protocol and you benefit from BETH.Example:
- 1.When AETH = 0.8, burn 1 AETH to get 1 BETH (BETH price = 0.8)
- 2.When AETH= 1.15, redeem 1 BETH to get 1.105 AETH (BETH price = 1.27)
So, which one is better?If I buy AETH at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per AETHBut, if I buy aFISH at 0.8, burn it for BETH, and redeem it at 1.15, I'm getting 1.105 AETH* 1.15 (aFISH current price) = 1,271 (+0.47$) per BETH 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 AETH and BETH holders when needed.