Phoenix Bonds: A Guide to Risk Free Earnings
Phoenix Bonds, a novel bond protocol developed by the LiNEAR team was launched on January 16th. As the 15-day bootstrap period comes to an end, claiming is now available for users to realize gains. At the moment, Phoenix Bonds recorded a TVL of around US$1.5 million. Compared with normal NEAR staking, $pNEAR’s yield was amplified by 34 times, and the APR is currently over 310%.
Participating in Phoenix Bonds is like joining a game where you can use different strategies to level up your returns. Adopting the right strategy at the right time under the right conditions is crucial to maximizing profits. In this post, we are going to introduce three basic strategies you should know in order to maximize your earnings on Phoenix Bonds.
Explore more and start your bonding journey with Phoenix Bonds now:
https://phoenix.linearprotocol.org/
Bond Strategy
You bond $NEAR on Phoenix Bonds and start accumulating $pNEAR following the bonding curve. Now comes the question — when is the optimal time for you to claim the accumulated $pNEAR? Note that you can no longer cancel a bond to get back your $NEAR after claiming. Here’s what you can do to optimize your claiming and thus your profit:
- Monitor your break-even point. Your bond breaks even when the market value of the accumulated $pNEAR equals the $NEAR input;
- After surpassing the break-even point, you can either wait for a longer time to accumulate more $pNEAR, or claim your $pNEAR for profit.. After claiming, your can:
- Market sell your $pNEAR to take profit;
- Sell $pNEAR for $NEAR, rebond $NEAR, compounding your gains; Hold your $pNEAR and enjoy the perpetually amplified $NEAR staking rewards;
- Provide liquidity to the $pNEAR — $NEAR trading pair, to farm multiple rewards.
Note that the market price of $pNEAR fluctuates, which will affect the time needed to reach break-even, and thus your profit. But no need to worry, since Phoenix Bonds has your principal protected — you can always recover your bonded $NEAR before claiming $pNEAR. This also enables more flexible strategies, for example, users can borrow $NEAR using stablecoin as collateral, and bond the borrowed $NEAR with Phoenix Bonds. If they need to repay the debt anytime, they can always cancel the bonds, get back the borrowed $NEAR with no waiting period. Also, since $pNEAR has a fast-rising price floor, the downside is limited.
Trading Strategy
If you are a trader and want to make profit on the secondary market, a simple strategy is to arbitrage between $pNEAR and $NEAR. — You can buy $pNEAR when the market price of $pNEAR is close to its floor price (with a low premium), and sell $pNEAR when it is higher than the floor price (with a high premium). Claiming and rebonding will cause fluctuations in $pNEAR price, which provide opportunities for “arbitrage”.
Trading $pNEAR has limited downside risk because of the guaranteed price floor. However, this strategy does require close monitoring of the market and somewhat frequent operations. The yield generated from trading is also not as stable as the Bond Strategy.
Liquidity Provision Strategy
You can also choose to provide $NEAR/$pNEAR liquidity to earn trading fees and liquidity incentives. Ref Finance launched the $NEAR/$pNEAR trading pair on February 1st 2023 and kickstarted liquidity mining for all Phoenix Bonds users.
Start farming now https://app.ref.finance/pool/3819 !
The liquidity incentive for $NEAR/$pNEAR comes from all staking rewards generated in the bootstrapping period, plus the 3% claiming fee generated every time a user claims their bonds. $pNEAR price is highly correlated with $NEAR price, meaning a much lower risk of impermanent loss to users.
These are just some of the strategies for Phoenix Bonds. You can even use a combination of them to create your own. Phoenix Bonds’ product design has incorporated Game Theory, and it’s really a game of chicken. As long as you do it at the right time, other people’s opportunity cost will turn into your amplified yield, perpetually.
Start the bonding game with Phoenix Bonds now and explore the strategies:
https://phoenix.linearprotocol.org
Disclaimer: Nothing in this blog constitutes investment advice, performance data or a recommendation for any individual.
If you are new to Phoenix Bonds, read the following articles to get yourself familiarized with how it works.
Introduction:
Step-by-step guide:
About Phoenix Bonds
Developed by LiNEAR Protocol, Phoenix Bonds is a novel bonding mechanism that enables principal-protected amplified yield for end-users. Compared to the current ~10% average APY from $NEAR staking and liquid staking protocols, Phoenix Bonds can possibly amplify the yields potentially tenfold or even more.
Please follow the LiNEAR-Phoenix Bond Twitter account to get the latest updates.
