What Is Bonding?

How Does It Work?

A bond is a fixed-income instrument that essentially serves as a loan made by an investor to a borrower. A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debt-holders, or creditors, of the issuer.

Bonding allows The Pantheon to acquire its own liquidity and other assets such as ETH, USDC, SYM, and more by selling PAN at a discount to the current market valuation in exchange for these assets.

The protocol automatically quotes the user with terms such as the bond price, the amount of PAN tokens entitled to the bonder, and the vesting term. The bonder can claim the PAN tokens as they linearly vest, and at the end of the vesting term, the full amount can be claimed.

The discount of these bonds will be based on a lever built into the protocol. Bonded tokens are then locked inside of the treasury and invested based on optimized yield strategies.

The bonded assets will be stored in the treasury, with all treasury token rewards compounded to accumulate voting power.

The pricing of these bonds will follow the concept of a dutch auction where the discount increases if there is a lack of demand for bonding. As soon as a purchase is made, the price will increase dramatically, and will proceed to incrementally decrease until another buyer emerges. This process continues in perpetuity, allowing the market to determine an appropriate price without the use of any *Oracles.

*Please note, Oracles may be utilized by the protocol in the future.