# 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.