TLDR: They are sweet. And you will like it. For real, you should read this! But ok, here are the highlights: Sweet Bonds allow users to access tokens (initially $PACOCA) at a discounted rate in exchange for their liquidity positions. By providing ownership of liquidity for Paçoca, Sweet Bonds help ensure the stability of the protocol. Additionally, soon, users can look forward to partnership bonds and delicious discounts for their favorite tokens.
As part of the counter-inflation plan proposed by the Paçoca team, we are pleased to announce our newest product: Sweet Bonds.
What are Sweet Bonds?
Paçoca Sweet Bonds combine traditional finance and decentralized finance features to offer an innovative solution within the DeFi ecosystem. These bonds, employed by the Paçoca platform, help maintain the stability of its native token, PACOCA, and manage the project’s treasury.
Users can access their preferred tokens at a discount by depositing Liquidity Provider Tokens (LPs) like PACOCA-WBNB or PACOCA-BUSD into Paçoca Sweet Bonds. In return, they receive discounted tokens that vest over time, providing both liquidity and stability to the platform.
- Users deposit LP tokens: Users deposit their chosen LP tokens (e.g., PACOCA-WBNB or PACOCA-BUSD) in exchange for discounted tokens compared to the market price.
- Treasury management: The deposited LP tokens are used to grow and manage the Paçoca treasury, which may involve providing liquidity and allocating funds.
- Issuance of bonds: These bonds have a vesting period, which means that the PACOCA tokens are released gradually over time, ensuring a long-term commitment from bondholders.
- Bond discounts and incentives: To encourage users to participate, bonds are typically offered at a discount compared to the current market price of PACOCA. This discount incentivizes users to lock up their LP tokens and support the Paçoca ecosystem.
- Staking rewards: As PACOCA tokens are released to bondholders over the vesting period, users can stake their PACOCA tokens to earn additional staking rewards, further increasing their yield.
In summary, Paçoca bonds allow users to deposit LPs in exchange for discounted tokens. The platform uses these LP tokens to manage and grow its treasury while users benefit from a discounted rate and potential staking rewards. This mechanism helps to maintain stability in the Paçoca ecosystem and incentivizes long-term participation from users.
How is the discount pricing calculated?
Sweet Bonds discounts are automatically calculated considering four primary factors:
- Bonds have a determined initial price;
- Bond prices decrease over time (bond discount increases);
- Bond prices increase when users deposits into a bond;
- Bond discounts can change as market prices fluctuate.
Those four factors ensure the safety of Sweet Bonds, at the same time providing a fair discount based on market pricing. The four Sweet Bonds will start with a 15% to 20% discount, pre-determined by the Paçoca team. Over time, the bond price will increase or decrease based on the four factors mentioned above.
Users will not be able to buy bonds that are not discounted, but their prices will decrease over time.
Why are Sweet Bonds important?
Sweet Bonds provide multiple benefits to the Paçoca ecosystem. First, they allow the project to increase their POL (protocol-owned liquidity) dynamically and naturally, which provides stability, less price impact for trades, and ensures the growth of the project. Additionally, Sweet Bonds help to reduce the token inflation.
Sweet Bonds are an innovative and vital piece of Paçoca financial chess. Combining centralized and decentralized approaches, our newest product provides users a discount on their favorite token, while increasing the overall project’s liquidity and supporting the growth of the protocol.