LiNEAR Protocol
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Phoenix Bonds

A novel bonding game built on LiNEAR protocol

What is Phoenix Bonds?

Phoenix Bonds is a principal-protected bonding platform that help protocols with liquidity-bootstrapping and provide perpetually-boosted yield to users. Phoenix Bonds can work with all yield bearing assets. The first version will be launched for $LiNEAR, the staking derivative token of LiNEAR Protocol.

How does LiNEAR Phoenix Bonds work?

Core mechanism

Bond

Users bond $NEAR, which goes into the Pending Bucket, and accumulates balance of $pNEAR over time. All $NEAR in the Pending Bucket will be deposited into LiNEAR protocol to generate staking rewards.
A=tt+acap(1c)A= \frac{t}{t+a}*cap*(1-c)
A: the amount of claimable $pNEAR
t: time lapse after bonding
cap: upper limit of $pNEAR amount one can receive,cap=Bonded amount / Redemption price
c: commission fee, c=3%

Cancel

Users can withdraw the bonded amount of $NEAR anytime before they choose to claim $pNEAR.

Claim

Users can claim the accumulated $pNEAR anytime after bonding. One bond can only be claimed once. After claiming, users get the accumulated $pNEAR, while their bonded $NEAR (now staked as $LiNEAR) enters the Reserve Bucket and the permanent bucket.
A 3% commission is collected upon claim on every bond, which will be mainly used to incentivize $pNEAR/$NEAR liquidity.

Redeem

Users can always redeem $pNEAR for $NEAR from the Reserve Bucket. The initial redemption price before the first claim is set at 1.0
Redemption price = Total $NEAR in the Reserve / $pNEAR supply
Redemption amount of $NEAR = Redemption price * Redeemd amount of $pNEAR

Components

Pending Bucket

All bonded $NEAR is held by Pending Bucket until claimed. All staking rewards of $NEAR goes to Reserve Bucket. When users claim $pNEAR, corresponding $NEAR (staked as $LiNEAR) is transferred from Pending Bucket to Reserve Bucket and Permanent Bucket, according to the following formulas:
  • Commission transferred to the treasury = Bonded $NEAR amount * commission fee
  • $NEAR transferred to Reserve Bucket = Accumulated $pNEAR * Redemption price
  • $NEAR transferred to Permanent Bucket = Bonded $NEAR amount - (Commission transferred to the treasury + $NEAR transferred to Reserve Bucket)

Reserve Bucket

Staking rewards from all three buckets go to Reserve Bucket, creating amplified yield for $pNEAR holders.

Permanent Bucket

Protocol-controlled-value (PCV) of Phoenix Bonds. It guarantees boosted yields to $pNEAR even when if Pending Bucket becomes empty.

Alpha controller

The alpha parameter of the accrual function variable implements a feedback controller which adjusts the parameter in one direction.
T_a =(Bond1_amount * t_1 + Bond2_amount * t_2 +...+ BondN_amount * t_N) / Total bonded amount
T_a: the size weighted average age of pending bonds
N: the amount of pending bonds
t_N: time lapse after bonding of bondN
T_target: target average age, T_target=15 days
When T_a <= T_target, alpha remains unchanged
When T_a > T_target, reducing by a 0.1% for each day
Alpha initial value:4.4 days
Alpha lower limit:0.1 days