# Phoenix Bonds FAQ

### What is $pNEAR (*perpetually-boosted* $NEAR)? <a href="#pqozni7roxdh" id="pqozni7roxdh"></a>

$pNEAR is an NEP141 token that is minted when users forgo their bonded $NEAR to the protocol and claim $pNEAR. The quantity of $pNEAR they can claim depends on their accrued virtual balance of $pNEAR when they claim.

$pNEAR is backed by the funds in the Reserve bucket. $pNEAR can always be redeemed for a proportional share of the Reserve - that is, **x**% of the $pNEAR supply redeems for **x**% of the $NEAR in Reserve(returned as the equal value of $LiNEAR).

$pNEAR captures a boosted rewards compared to $LiNEAR. As a result, the redemption value of a given amount of $pNEAR will grow faster than the underlying amount of $NEAR would grow if staked in LiNEAR pool. The redemption price acts as a price floor for the $pNEAR market price.

### How does Phoenix bonds create boosted rewards? <a href="#p1c400ee03hy" id="p1c400ee03hy"></a>

All of the staking rewards generated by all buckets in the system (Pending, Reserve and Permanent) flows to the Reserve bucket. Since $pNEAR can always be redeemed proportionally for $NEAR in the Reserve bucket, the $pNEAR token captures extra rewards generated by $NEAR that's outside the Reserve, creating an amplified yield.

### How can I get boosted rewards? <a href="#qx78koisbzx3" id="qx78koisbzx3"></a>

You will automatically get boosted rewards by simply holding $pNEAR.&#x20;

There are two ways to obtain $pNEAR:

* You can create a bond, accrue $pNEAR over time and claim your $pNEAR.
* You can buy $pNEAR on [Ref Finance](https://app.ref.finance/#near|phoenix-bonds.near).&#x20;

### What is the fair market price of $pNEAR?

Fair price of $pNEAR is bounded by two formulas:

Lower bound = (Total $NEAR in protocol - $NEAR in pending bucket ) / $pNEAR supply

Upper bound = Total $NEAR in protocol / $pNEAR supply

Although we expect $pNEAR to trade on the open market at a premium over the redemption price, the canonical mathematical definition of a fair price is yet to be solved.

### How is the $pNEAR APR & **Yield Amplification** calculated? <a href="#c2c3valbf2bj" id="c2c3valbf2bj"></a>

* $pNEAR APR = (Total $NEAR in protocol \* $LiNEAR staking APY) / $NEAR in Reserve
* Yield amplification = Total $NEAR in protocol / $NEAR in Reserve

### Can the system ever become unbacked or insolvent? <a href="#msk9k53dn7yb" id="msk9k53dn7yb"></a>

The $pNEAR supply is fully redeemable and is always backed by the underlying $NEAR in the Reserve.

### How can I burn $pNEAR and get back $NEAR or $LiNEAR?

$pNEAR floor price is lower than its market price in most of time. Instead of burning your $pNEAR, a more beneficial and recommended way is to swap $pNEAR to $NEAR on [Ref Finance](https://app.ref.finance/#near|phoenix-bonds.near).&#x20;

For those who choose to burn $pNEAR and receive $NEAR at floor price anyway, you can do that in [this page](https://linear.phoenixbonds.org/redeem).&#x20;

Economically, burning $pNEAR makes only sense when the market price is below the floor price, but it will be very hard for users to compete with arbitrage bots.