Chicken Bonds Introduction
Chicken Bonds is an unprecedented DeFi mechanism enabling projects/DAOs to bootstrap protocol-owned liquidity (POL) for their token at no cost! Chicken Bonds explore a novel principal-protected bonding mechanism that boosts the yield opportunities for end-users, enabling them to acquire newly issued bTokens in return for their bonded tokens. Holders of the bTokens earn amplified yield compared to staking the underlying. Chicken Bonds have no maturity date and no lock-up: users accrue bTokens over time which they can claim (Chicken In) at will, or opt to withdraw their principal at any time (Chicken Out). With this escape hatch, bonding is essentially risk-free. Instead of being inflationary, the bToken compounds the yield of the current POL & the pending bonds, delivering a Yield Amplification on top of traditional yield sources. It makes the bTokens a worthwhile investment, limiting the downside risks by a rapidly rising price floor. Chicken Bonds create a flywheel effect between bonding and bToken pricing: the more people bond, the more yield is retained for the bToken holders. A higher yield in turn increases the price premium over the underlying token, making bonding more attractive through a higher APR.