The Role of the LP Bond Market

The purpose of bond sales

Diamonde cleverly links liquidity providers, investors, and the agreement itself by issuing bonds, forming a virtuous cycle. This mechanism not only enhances the liquidity of the protocol, but also stabilizes the price of DIA, providing a solid foundation for the long-term development of the protocol.

LP basic pool is an important indicator of DIA protocol.

DIA can be pledged with compound interest, resulting in higher returns, and consensus can be reached after pledging;

LP bonds continue to be sold, bringing sustained liquidity;

This protocol uses liquidity and active liquidity returns to repurchase $DIA tokens.

  • Liquidity provider: Attracting new liquidity providers into the agreement by issuing discounted bonds, thereby increasing the depth of the agreement's funding pool.

  • Stable agreement price: When the market demand for DIA decreases, repurchasing DIA in the market can stabilize the price of DIA and prevent significant price fluctuations.

  • Agreement discount value: Users who participate in subscribing to bonds issued by the national treasury enjoy discounts on national treasury bonds, bringing additional income to platform users.

Bond price

The liquidity agreement of DIA protocol itself

The price of a bond is equal to: RFV/Premium FV has no insurance value:

  • RFV=2sqrt(constantProduct)* (LP/totalLP)

  • RFV is the minimum value of x+y when x=y Premium is Premium

  • Premium=1+(debtRatio *n)

  • debtRatio=bondsOutstanding/dDIAsupply

In non stablecoin pools, the discount of a single token asset is directly affected by the weight in the pool. When the actual weight of a certain token is higher than the target weight, it means that the supply of that token in the pool is excessive. In order to balance supply, the system will lower the opening discount of the token to reduce demand for it.

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