Infographic For Arth/Bond System

Behold, in all its glory - a simple diagram to illustrate how Arth/Bonds work, specifically in relation to the 12hr TWAP, 1hr TWAP, and how these measurements effect Bonds and Supply.

The second image is an alternative concept that could utilize real time price updates where the arrows are marked.

Very Rainbow, Much Vibrancy


Much love doge! :smiley: :smiley:

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Very nice!

Let me know if Iā€™m understanding things wrong, but the figure of 1% - 5% is associated with the amount of new debt created as the number of ARTHB allocated for purchase, right? So the blue area on the left would be debt created as 1% - 5% of ARTH supply as Bonds available for purchase; and both the green and yellow areas on the left are, up to 30% of ARTH supply is newly minted, proportionate to the 12hr twap % above target (90% of which is allocated to ARTHB redemption), the green area being where lp stakes get rewarded.

The amount of 1-5% is associated with the 12hr TWAP price being 1-5% above target price of $1. Within this area the protocol will mint new arth to pay off the bonds once the 1hr TWAP is above $1.

While bonds (debt) is outstanding, 90% of the newly minted arth is delegated to pay off that debt. From the remaining 10%, 2% is paid to the ecosystem fund, and 8% goes to the LP pools. The Arth/Dai pool earning 70% of that 8%.

Basically, bonds are paid off first. At which point supply expansion occurs above $1.05 on the 12hr twap, and that gives a full 70% to the Arth/Dai pool, rather than 70% of 8% during the situation where bonds are still being paid off.

The protocol has to mint new Arth before it can be redeemed. That is, the 12hr twap needs to be above $1 to mint arth for bonds, and the 1hr twap needs to be above $1 to claim/redeem it.

If you took bonds out of the equation, the protocol is not supposed to expand when 12hr TWAP is between $1 and 1.05 - but it will expand in this area by a small % when bond debt is outstanding.

Hope that makes sense.

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ok so arth is minted at a rate equal to the % of 12hr twap above target (up to 30%). At less than 5% above target, 100% of newly minted arth is for arthb redemption. Above 5%, 10% of the mint goes to lp rewards and ecosystem fund. got it.

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