Bonding

What is Bonding

Bonding is the secondary value accrual strategy of Peppermint. When users bond $MINT tokens, they are actually selling their assets in order to buy a bond from the protocol. The protocol quotes the bonder with terms for a trade at a future date. These terms include a predefined amount of $MINT the bonder will bonder and the time when vesting is complete. The bond becomes redeemable as it vests. I.e. in a 5-day term, after 2 days into the term 40% of the rewards can be claimed.

Bonding is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders bond discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

Bonding allows Peppermint to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since Peppermint becomes its own market, on top of additional certainty for $MINT investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.