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With decentralized and non-custodial staking, bonding allows users to trade various crypto assets for FFD at a discounted price. In exchange to the bond sales, the treasury grows, providing stability
When users bond, they are triggering the creation of FFD from the protocol. People provide assets like APT, ALT, LP Tokens etc and are rewarded with the same value of FFD. This process vests within a certain period which is pre-determined.
Of those newly minted FFDs:
- 20% goes to the treasury (used to invest in new projects)
- 80% becomes staking rewards to be paid to others who have staked FFD.
Bonding is a win-win situation because the user receives FFD with yield, and the treasury is receiving more assets such as ALT and APT to back the FFD token.
It enables participants to earn an extra bonus for token minting. Because the FFD token is pegged to a basket of assets, participants have a level of reassurance that price fluctuations will return to their intrinsic state.