Phoenix Bonds FAQ

What is $pNEAR (perpetually-boosted $NEAR)?

$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?

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?

You will automatically get boosted rewards by simply holding $pNEAR.

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.

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?

  • $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?

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.

For those who choose to burn $pNEAR and receive $NEAR at floor price anyway, you can do that in this page.

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.

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