Market Dynamics

An increase in staking and bonding can trigger an increase in the supply of FFD tokens. When this happens, an increase in FFD token purchases from the market often precedes. In turn, this increases the price of the FFD token, allowing the protocol to sell FFD tokens at a higher rate. Accordingly, stakers receive a higher yield, and bonders receive a more significant discount. Also, this series of events increases the capacity for the creation of new bonds. However, the same is true in reverse. Moreover, declining demand can reduce staking rewards and the capacity for the protocol to mint new assets.