Bonding

What is Bonding?

Bonding is the secondary value accrual strategy of VESQ. Bonds are a cross between a fixed income product, a futures contract, and an option. The protocol quotes the bonder with terms for a trade at a future date. These terms include a predefined amount of VSQ the bonder will receive 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 VESQ to accumulate its own liquidity. We call our own liquidity VLP. More VLP ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since VESQ becomes its own market, on top of additional certainty for VSQ investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.