LiNEAR Protocol to Launch Phoenix Bonds, a Principal-Protected Amplified Yield Product on NEAR
Earn +100% APY with No Loss*
The LiNEAR team will launch its newest DeFi product Phoenix Bonds, a novel bond mechanism that enables principal-protected amplified yield for end-users on Jan 16th 2023. Compared to the current ~10% average APY from $NEAR staking and LiNEAR liquid staking, Phoenix Bonds can possibly amplify the yields tenfold or even more.
If you want to participate in Phoenix Bonds and maximize your yields, remember to unstake your $NEAR now and start bonding on Phoenix Bonds on Jan 16th.
How do Phoenix Bonds Work?
Phoenix Bonds operates a treasury consisting of three parts: Pending Bucket, Reserve Bucket and Permanent Bucket. Users bond $NEAR to the Pending Bucket to create a bond. The bonded $NEAR is then staked in LiNEAR protocol to generate staking rewards. The yield earned by the Pending Bucket flows to the Reserve Bucket. Users accumulate balance of $pNEAR over time. $pNEAR represents the ownership of Reserve Bucket shares. The floor price of $pNEAR will continue to appreciate against $NEAR. All $NEAR in the three buckets will be deposited into LiNEAR protocol to generate staking rewards.
In Phoenix Bonds, there are three main actions:
- Cancel — Users can withdraw the bonded amount of $NEAR anytime before they choose to claim $pNEAR.
- Claim — Users can claim the accumulated $pNEAR, while their bonded $NEAR (now staked as $LiNEAR) enters the Reserve Bucket and the Permanent Bucket.
- Redeem — Users can redeem $pNEAR proportionally for $NEAR from the Reserve Bucket any time.
Yield amplification for $pNEAR holders comes from the fact that yields from all three buckets (Pending, Reserve, Permanent) flow to the Reserve Bucket. Since $pNEAR can always be redeemed proportionally for $NEAR in the Reserve Bucket, the $pNEAR token captures extra rewards generated by $NEAR that’s outside the Reserve, creating an amplified yield.
With a steady stream of users choosing to bond $NEAR in the Pending Bucket, together with the protocol-owned $pNEAR in the Permanent Bucket that guarantees additional yields, the rate of return for holding $pNEAR is set to be higher than that of plain $NEAR staking. The earlier you participate, the higher the rate of return you could potentially earn.
Key Benefits of Phoenix Bonds
- Principal Protection: Users can withdraw their bonded $NEAR at any time before claiming, without loss of initial capital. Rational users will only make a Claim when the accumulated $pNEAR value is greater than their bonded $NEAR, otherwise they can continue waiting or simply cancel the Bond and get back the amount originally deposited. So you don’t have to worry about losing your principal at all.
- Yield Amplification: Assuming that the ratio of the amount of $NEAR in the Pending Bucket, Reserve Bucket, and Permanent Bucket is 8:1:1, then the APY generated by holding $pNEAR will reach 100%.
- Growing Floor Price of $pNEAR: $pNEAR represents the corresponding $NEAR share in the Reserve Bucket, which forms an ever-growing price floor for $pNEAR. Since the Reserve Bucket has a much higher rate of return than plain $NEAR staking, the rate at which the price floor grows will be very fast.
Phoenix Bond Timeline
Phoenix Bonds will enable its bond functions on Jan 16th, 2023, and users will be able to begin bonding $NEAR tokens. After the mainnet launch, we will enter a 15-day bootstrapping period. During the bootstrapping period, users can only cancel but not claim their bonds. After the bootstrapping period, users can start claiming their accumulated $pNEAR. All yields generated from the bootstrap period will be used to incentivize $pNEAR / wNEAR liquidity.
The earlier you bond your $NEAR, the faster the accumulation of $pNEAR will be, and the higher yield you can get. Currently, it takes 52–65 hours to unstake your $NEAR, so make sure you unstake your $NEAR in time and start bonding on Phoenix Bonds on Jan 16th, 2023
*No loss as measured in the amount of NEAR a user deploys to Phoenix Bonds. The fiat value of the NEAR could change.
To learn more about Phoenix Bonds, please visit: https://docs.linearprotocol.org/phoenix-bonds
About LiNEAR
LiNEAR Protocol is the most secure liquid staking solution built on NEAR. LiNEAR unlocks liquidity of the staked NEAR by creating a staking derivative to be engaged with various DeFi protocols on NEAR and Aurora, while also enjoying over 10% APY staking rewards of the underlying base tokens. As a Cornerstone-incubated project, LiNEAR will adopt $CORN as its governance token and its native token $LiNEAR will be fully captured by the Cornerstone treasury.
