Bonding for $TLX

An alternative way of redeeming leveraged tokens

Bonding has been suspended in line with TIP 12. The remaining bonding supply will be burned in due course.

TLX allows users to bond their leveraged tokens for $stTLX at a discount, as an alternative to redeeming against the underlying asset. The leveraged tokens collected in this process are designated as protocol-owned liquidity, enhancing liquidity management within the system.

What is bonding?

Bonding your leveraged tokens for $stTLX is a way of acquiring $stTLX at a discount against the market rate. The discount starts negative but increases slowly over time. The discount will continue to increase until the next user bonds. When a user bonds the discount will decrease back down. Keep a close eye on the bonding discount to try to find an optimal time for bonding.

How does bonding work?

The TLX bonding mechanism is implemented using a base amount of $sUSD, that at any point can be bonded for the whole amount of bondable $stTLX. The amount of bondable $stTLX starts at zero and increases linearly per second. In a bonding event, the available amount of $stTLX decreases by the respective amount, the discount decreases respectively, and bondable $stTLX continues accruing.

The amount of $stTLX received can be expressed as:

$stTLX received = (bondable $TLX / base amount) ∗ $sUSD value bonded

The base amount can be updated.

Example

Base amount = $15,000

1 $TLX = $0.1

Accumulation pace = 0.7 $TLX / sec

Parameters are for exemplary purposes only

Given these exemplary parameters, bonding would become profitable 59.52 hours after the beginning of the cycle.

$$\frac{\$15\,000}{\$0.1 \times 0.7 \times 60 \times 60} = 59.52 \text{ hours}$$

After three days, the accumulated value of $TLX that could be bonded for $15,000 would be worth $18,144 (181,440 $TLX), which is equivalent to a 17.33% discount.

$$\$0.1 \times 0.7 \times 60 \, \text{sec} \times 60 \, \text{min} \times 24 \, \text{h} \times 3 \, \text{days} = \$18\,144$$

$$\frac{\$18\,144 - \$15\,000}{\$18\,144}\times 100 = 17.33\%$$

Leveraged tokens worth $1,000 could therefore be bonded for $1,209.60 worth of $stTLX.

Note that in this case only a portion of the base amount would be bonded. The amount of bondable $stTLX would decrease, but the ratio at which $stTLX would be bonded would still be based on the constant base amount. Hence, the available discount at this point would have decreased to 11.42%.

$$\$18\,144 - \$1\,209.60 = \$16\,934.40 \quad (\text{value of the remaining bondable } \$\text{stTLX})$$

$$\frac{\$16\,934.40 - \$15\,000}{\$16\,934.40} \times 100 = 11.42\%$$

For more information regarding protocol-owned liquidity, please refer to the designated section:

Protocol-owned Liquidity