It has been over a year since we launched Liquity, and we’re more than happy with how it has evolved while sustaining significant growth, and withstanding several stress tests. Despite the bear market, the Liquity protocol has demonstrated its resilience and LUSD has solidified its role as the most decentralized stablecoin. We’re committed to strengthening that position and are actively working on new integrations with our expanded growth team.
Meanwhile, our engineering team have been heads down with simulations and development, building out a new project.
Enter “Chicken Bonds”!
With Chicken Bonds we’re introducing an unprecedented concept that will enable projects/DAOs to bootstrap protocol owned liquidity (POL) for their token at no cost. We’re aiming to solve one of the biggest pain points in the industry: liquidity for DEX markets.
A novel principal-protected bonding mechanism boosts the yield for end users, enabling them to acquire newly issued Boosted Tokens (bToken) in return for their bonded tokens.
Unlike other bond products, Chicken Bonds have no maturity date and no commitment: users accrue bTokens which they can claim (Chicken In) at will, or opt to withdraw their principal at any time (Chicken Out). With this escape hatch protecting the principal, bonding is a risk-free investment (excluding smart contract risk). On the other hand, long term holders of the bTokens will benefit by accruing a boosted yield.
A Yield Amplification mechanism makes the bTokens worth holding, while limiting the downside risks through a rising price floor. The yield of the bToken is amplified by additional yield sources such as the protocol owned liquidity (POL) and the pending bonds which are all put to work.
See the 3-part series below where we're explaining the concepts behind Chicken Bonds in more detail.
For those who want to dive deeper or even help our research team, we have released our whitepaper along with a 100'000 LQTY bounty for an open research question (pricing the bTokens). Find out more here. Chicken Bonds is currently a work in progress. All kinds of feedback is highly appreciated. More information about concrete implementations will follow soon.
The first implementation of the concept will be LUSD Chicken Bonds. We will release more information and the next steps in upcoming articles. So stay tuned for more!