What is bonding?

Bonding is the secondary value in Wayland Dao. It allows Wayland Dao to acquire its own liquidity and for others to reserve assets like BUSD by selling Wand at a discount in exchange for these assets. The protocol quotes the bonder with terms such as the bond price, amount of token and others terms to regulate the assets and selling.

Bonding is considering as an active, because is a good 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 to own our liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. The bonds is the security for the investor in terms of profit, discounts in the token price and better APY for all.

Who works BONDS In Wayland Dao

When Wayland increases the size of its reserves by selling Bonds and allowing investors to buy WAND tokens directly from the protocol for a discounted price. Bond price will generally trail below market prices in order to incentivize Bond sales allowing the protocol to offer higher APYs for Stakers and increase its reserves to raise the price floor of the WAND token by backing each WAND token with a greater value of assets.

For the market trends the protocol will respond in different ways:

BOND movement

1- In positive market conditions (steady or rising prices). Bond prices will trail below market prices. This incentives investors to buy the WAND from the protocol directly for a discount, thus growing the treasury increasing APYs.

2- Flat market conditions warrant a similar response — Bond prices will fluctuate below market prices to incentivize Bond sales. This will increase APYs and make market purchases for Stakers more attractive over time. Bond price fluctuations are caused by people buying and redeeming bonds.

3- In fiat markets, Bond prices will fluctuate below market prices as people buy them. This incentives investors to buy WAND from the protocol directly for a discount, which increases APY’s and brings in new market buyers to increase the price of WAND.

4- When prices are falling, Bond prices will fall with them, but will lag behind. This makes market purchases more attractive than Bond purchases, which helps to stabilize the price. This, combined with the fact that the protocol will use its reserves to buy back and burn WAND tokens creates a speculative expectation of buying pressure, which also assists in price stabilization.

5- In negative market conditions (falling), Bond prices will trail above market prices, thereby disincentivizing Market purchases. This stabilizes market prices as investors seek lower entry prices. During negative market conditions. APY’s will also fall with bond sales. The DAO will however use its reserves to buy back and burn WAND to stabilize the price.

In all of scenarios the best is the stability of the token for more bonds sales and more APY for all the investor and more profitable protocol. Because of that the bonds sales is super important to the protocol himself.

Bond Sales

Bond sales bring profit to the protocol, which in turn allows APYs to remain high and creates a more attractive environment for investors. A major focus is being placed upon analyzing the economics of our bonding mechanisms in order to offer the best possible bonds without compromising the integrity of the protocol. Additionally, marketing materials are always being created and updated to advertise and explain bonding to lower the barrier to entry for investors who are interested but wish to learn more. We anticipate that once our marketing operation reaches a critical mass, bond sales will rapidly increase and the associated APY increase will lead to positive market action.