♾️Bonds

Bond prices will generally trail below market prices in order to incentivise bond sales allowing the protocol to offer higher APYs for Stakers and increase its reserves to raise the price floor of the CADT token by backing each CADT token with a greater value of assets.

There are three market trends, each of which requires a different response from the protocol: In positive markets (prices are increasing), Bond prices will trail market prices and allow investors to buy CADT at a discount and increase APYs, bringing in new market buyers.

Flat market conditions warrant a similar response - Bond prices will fluctuate below market prices to incentivise bond sales. This will increase APYs and make market purchases for Stakers more attractive over time. Bond price fluctuations are caused by people buying and redeeming bonds.

When prices are falling, Bond prices will fall with them, but will lag behind. This makes market purchases more attractive than Bond purchases, which helps to stabilize the price. This, combined with the fact that the protocol will use its reserves to buy back and burn CADT tokens creates a speculative expectation of buying pressure, which also assists in price stabilization.