# Phoenix Bonds ## 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. $$ A= \frac{t}{t+a}*cap*(1-c) $$ A: the amount of claimable $pNEAR t: time lapse after bonding a: see [Alpha controller](#alpha-controller) cap: upper limit of $pNEAR amount one can receive，cap=Bonded amount / Redemption price c: commission fee, c=3% If you are a $LiNEAR holder and want to bond $NEAR without unstaking, you could choose to bond by depositing $LiNEAR. Please note that principal protection of Phoenix Bonds is defined in terms of value in $NEAR. This means you may receive less $LiNEAR than what you bonded when cancelling the bond, because $LiNEAR price always grows every epoch. #### 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 1% for each day Alpha initial value：4.4 days Alpha lower limit：0.1 days --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.linearprotocol.org/phoenix-bonds.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.