Bonds

What are ICDB (ICE Dollar Bonds)?

Bonds are unique tokens that can be utilized to help stabilize ICD price around peg (1 MATIC) by reducing circulating supply of ICD if the TWAP (time-weighted-average-price) goes below peg (1 MATIC).

When can I buy ICDB?

ICDB can be purchased only on contraction periods, when TWAP of ICD is below 1.

Every new epoch on contraction periods, ICDBs are issued in the amount of 3% of current ICD circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of ICD, no more bonds will be issued.

Note: ICDB TWAP (time-weighted average price) is based on ICD price TWAP from the previous epoch as it ends. This mean that ICD TWAP is real-time and ICDB TWAP is not.

Where can I buy ICDB?

You can buy ICDBs if any are available, through the Bonds page on icecolony.com, anyone can buy as many ICDBs as they want as long as they have enough ICD to pay for them.

There is a limit amount (3% of ICD current circulating supply) of available ICDBs per epoch while on contraction periods, and are sold as first come first serve.

Why should I buy ICDB?

First and most important reason is Bonds help maintain the peg, but will not be the only measure used to keep the protocol on track, more on that on DAO Fund section here.

ICDBs don't have a expiration date, so you can view them as a investment on the protocol, because you get benefits from holding bonds in the long term.

Incentives for holding ICDB

The idea is to reward ICDB buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.

So after you buy ICDB using ICD, you get 2 possible ways to get your ICD back:

1. Sell back your ICDB for ICD while peg is between 1 - 1.1 (1 MATIC) with no redemption bonus. This to prevent instant dump after peg is recovered

2. Sell back your ICDB for ICD while peg is above 1.1 (1 MATIC) with a bonus redemption rate

The longer you hold, the more both the protocol and you benefit from ICDBs.

Example:

1. When ICD = 0.8, burn 1 ICD to get 1 ICDB (ICDB price = 0.8)

2. When ICD = 1.15, redeem 1 ICDB to get 1.105 ICD (ICDB price = 1.27)

So, which one is better?

If I buy ICD at 0.8, and hold it until 1.15 and then sell, I'm getting +0.35$ per ICD

But, if I buy ICD at 0.8, burn it for ICDB, and redeem it at 1.15, I'm getting 1.105 ICD * 1.15 (ICD current price) = 1,271 (+0.47$) per ICDB redeemed.

But what if getting back to peg is taking too long ?

In such cases, we will be doing buybacks and offering extra incentives from Royalty Fees to increase the price.

When can I swap ICDB for a bonus?

ICDB TWAP (time-weighted average price) is based on ICD price TWAP from the previous epoch as it ends. This mean that ICD TWAP is real-time and ICDB TWAP is not. In other words, you can redeem ICDB for a bonus when the previous epoch's TWAP > 1.1.