Bonding refer to the process of trading Liquidity Provider (LP) tokens for native tokens at a discount price from market price.

How does bonding works?

Bonding allows you to buy OTWO at a lower cost basis. In return for selling your asset-pair (LP), the protocol will sell you OTWO at a discount.
The idea here is that bonds will give you some amount more OTWO than you would have received if you had bought on the market and then staked. The amount of “how much more” will be determined by how many bonds there are already available.
As opposed to staking, bonding is more an active, short-term strategy. The bonding market can be seen as a parallel market to $OTWO, more unpredictable and risky. Therefore bonding requires users to manage their investment actively and monitor the bonding rates constantly in order to be as profitable as someone using staking.
With OTWO, the process of purchasing bonds has been simplified to a one-step process. Instead of having to purchase the LP tokens then trading them for Bonds, users only need to have the asset-pair (wsOHM + OTWO) in their wallet to purchase the bonds directly. Bonds are vested for 5 days and are paid out per block height. For example, if you were to purchase a bond, after the first day you would have received 20% of the vested amount, then 40% after the second day, until 100%.
To sum up, the following assets will be used as bonds.
  • OTWO-wsOHM
  • wsOHM