Acquiring xSDT at a discount with Stake DAO Bonds!

A few months ago, we launched a new way to reward all of our legendary SDT token holders while allowing the DAO to accumulate liquidity for the long-haul. Today, anyone can leverage our bond offering on Olympus Pro to support the DAO with liquidity, while accumulating xSDT (staked SDT) at a discount to the spot market!

Here’s a quick guide to explain the idea behind Stake DAO bonds, and how anyone can use them to acquire additional Stake DAO tokens at no additional cost.

Why bonds?

Traditionally, DeFi protocols have had to pay out huge incentives to maintain liquidity in their token, distributing them as farming rewards in liquidity pools.

This model has caused a litany of problems for both protocols and liquidity providers (LPs), typically leading to heavy sell pressure in the token, impermanent loss for LPs, and all-in-all, generally unsustainable outcomes.

Earlier this year when our partner Olympus DAO launched their bond marketplace, we jumped at the chance to be included in the first intake! They have innovated the best mechanism on the market for improving protocol liquidity.

By offering bonds, Stake DAO can:

  • Own our liquidity
  • Incentivize users to hold for the long-run
  • Improve price stability in SDT
  • Unlock new revenue streams

For users, bonds enable anyone to support Stake DAO by providing liquidity, avoid impermanent loss, and acquire discounted tokens!

How do they work?

Bonds offer a percentage return over the bond’s vesting period (seven days), distributed in xSDT. As they vest linearly, bond holders can claim the vested portion of the payout at any time, or wait to claim it in its entirety at the end of the seven days.

In the example below, a bond holder would make a return of 3.93% in seven days.

How to purchase bonds

  1. The first step is to acquire LP tokens by adding liquidity to the SDT-ETH pool on Sushi. You will need SDT and ETH to complete this step.
  2. Next, head to the SDT-ETH SLP Bond on Olympus Pro and connect your wallet.
  3. Enter the amount of LP tokens you’d like to supply. The interface will display the amount of xSDT you will receive as payout over the bond’s seven-day vesting term.
  4. If this is your first time purchasing bonds, you will need to approve the bond contract, enabling it to spend your LP tokens. After this has been done, you can sign the transaction to purchase the bond.
  5. Once your bonds are vesting, to claim rewards, head to the Olympus Pro dashboard and click “Claim.” For bonds that have fully vested, click “Claim All.”

Is there an ideal time to buy bonds?

Always check the percentage return on the interface before bonding, to ensure it is displaying a positive ROI.

If demand for bonds is sufficiently high, the Olympus Pro UI will show a negative yield — this is not an attractive time to purchase xSDT bonds, and you may incur a loss. Wait until yield is positive before bonding.

That’s it, thanks for helping create more sustainable provisions for liquidity and supporting the Herd — enjoy the extra xSDT!

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