Mute Bonds
Bonding is the process of trading MUTE-ETH LP share to the Mute DAO for MUTE. The protocol quotes an amount of MUTE and a vesting period for the trade. It is important to know: when you purchase a bond, you are selling your LP share/tokens. The Mute DAO compensates you with more Mute than you’d get on the market, but your exposure becomes entirely to Mute and no longer to MUTE-ETH LP.
The purpose of Mute bonds is to increase the amount of Protocol Owned Liquidity via the Mute DAO which increases the revenue towards the treasury and long term liquidity for the protocol. The benefit to bonding allows a user to purchase Mute at a lower cost basis. Bonds are sold at a first come first serve basis. A bond ROI starts at 0% and increases slowly until it is purchased. Once purchased, the cycle is reset with a new bond. A bond takes 7 days to mature and the Mute to be settled.
Let's take an example: Exchanging $15k worth of MUTE/ETH LP with a bond that currently has a 15% ROI. Bonding would sell the $15k MUTE/ETH LP tokens to the Mute DAO and in exchange, 7 days later, the user is able to redeem $15k * 1.15 = $17.25k worth of Mute at the time the bond was purchased. The MUTE put up for bonds comes from the Mute treasury which grows via buybacks from the Switch platform, and MUTE 1% transaction fees. The MUTE bond dApp will be linked here once available.
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