Chicken Bonds is Live!

Hi everyone, the wait is finally over, Chicken Bonds is now live. Here's a quick primer on the things that you can now do, and what to expect for the coming weeks:

‍Why bond?

You get bLUSD which gives you access to an amplified yield compared to depositing your funds directly into the Stability Pool. And bonding is the only way to mint a generative Dynamic Chicken Bonds NFT. At start, while bonding, your NFT will be an egg. Once you Chicken In or Chicken Out, your NFT will change into either a Chad-Chicken or a Runaway-Chicken. See below how you can increase chances to get a rare NFT.  

Why is bLUSD valuable?

It is backed by the Reserve Bucket which receives and auto-compounds the yield from users bonding as well as the entire POL yield (see our post about the yield amplification). bLUSD can be always redeemed against LUSD in the Reserve. That way the backing and the bLUSD price floor are ever increasing.

‍How do I start?

‍To create a bond, you’ll need some LUSD. You can obtain LUSD by opening a Trove on Liquity and borrowing LUSD against your ETH, or purchasing it on a DEX such as Curve or Uniswap.

‍What can I do now?

You can now create a bond using one of the several front ends that are currently live. The minimum amount needed to create a bond is 100 LUSD.

When creating a bond users will receive a Dynamic Chicken Bonds NFT that will be visualized by a generative egg visual (view them on OpenSea). The ERC-721 NFT represents the bond and is tied to the deposited assets, like Uniswap V3 LP NFT. By selling the egg NFT the user transfers also all related assets, be mindful of that!

What front ends are available?

As with Liquity, Chicken Bonds run on completely decentralized frontends. You can find a list of frontends that support Chicken Bonds on our website.

Please be aware of scams. A legit front end will never ask you for your seed phrase. We recommend using the frontends listed on the Chicken Bonds website.

How can I get rare Chicken Bond NFTs?

Chicken Bonds NFT

The Dynamic Chicken Bonds NFT will have some random traits, and some that are influenced by on-chain parameters. You can increase the chances of receiving a rarer NFT by depositing a larger amount of LUSD into the bond, and additionally if your address meets one or more of these criteria:

  • You have a LUSD loan open on Liquity (Trove)
  • You are staking LQTY
  • You are voting on the gauge for the Curve LUSD/3CRV pool

We will release more details shortly on the artwork and traits of the Dynamic Chicken Bonds NFTs.

When can I expect to Chicken in?

We expect that your bond should break even after ~15 days and that an optimal re-bonding time could be reached at around 30 days. There are several strategies you can pursue and which might influence your Chicken In timing. As your bLUSD accrues over time, you will have to decide e.g. if you want to:

  • Wait until in profit, claim, sell for LUSD and rebond with a higher principal
  • Claim shortly after break even and be an early LP benefiting from trading fees

Are there any fees when I Chicken In?

There is a 3% fee charged when a bonder Chickens In and claims their bLUSD. This fee is charged in LUSD, and is sent to the Curve gauge as a reward for LPs in the bLUSD/LUSD-3CRV pool.

What if I want to get my bonded LUSD back?

You can Chicken Out at any time and retrieve your principal as long as you haven’t Chickened In (see risks below).

What are the risks of using Chicken Bonds?

By using Chicken Bonds you are subject to the smart contract risks of the Chicken Bond protocol as well as all its dependencies such as B. Protocol or Yearn.

There are also economic risks as the market value of bLUSD is volatile - it can go up or down, but it always has a lower bound equal to the bLUSD redemption price. The system further relies on B. Protocol to sell Liquity’s liquidation gains (in ETH) back to LUSD, involving additional price risks.

For more details see What are the risks associated with LUSD Chicken Bonds?

Has the project been audited and what are the smart contract addresses?

Yes, the Chicken Bond system has been audited by Coinspect and Dedaub. See the audit reports on our GitHub.

And these are the smart contract addresses of the Chicken Bonds system:

  • BLUSD_AMM_ADDRESS: 0x74ED5d42203806c8CDCf2F04Ca5F60DC777b901c
  • BLUSD_AMM_STAKING_ADDRESS: 0xdA0DD1798BE66E17d5aB1Dc476302b56689C2DB4
  • BLUSD_TOKEN_ADDRESS: 0xB9D7DdDca9a4AC480991865EfEf82E01273F79C3
  • BOND_NFT_ADDRESS: 0xa8384862219188a8f03c144953Cf21fc124029Ee
  • BOND_NFT_INITIAL_ARTWORK_ADDRESS: 0x91678E87e220855cb4Ec169AbDC9E7B5f3dC0187
  • CHICKEN_BOND_MANAGER_ADDRESS: 0x57619FE9C539f890b19c61812226F9703ce37137

Where can I find more information on how Chicken Bonds works?

Please check out our User Docs which will give you an in depth fundamental understanding of how Chicken Bonds works.

For additional information, please check out our blog which covers a list of topics like:

Bonders, it's time to get ready for a game of Chicken!