Bond Protocol is a system to create OTC markets for any ERC20 token pair with optional vesting of the payout. Bond issuers create markets that pay out a Payout Token in exchange for deposited Quote Tokens.
Arose from Olympus DAO OHM Bonding (attempt to turn OHM into a reserve asset)
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Overview:
A smart contract that creates a bond between a quote token (what the project wants to receive) & in return for a payout token (what they offer in return - usually native token)
Type:
Sequential Dutch Auctioneer (SDA)
In a Sequential Dutch Auction, once a purchase is made, the price increases from the purchase and starts to decay again until another purchase is made. One can also view this as immediately starting a new auction on the next token after a purchase is made. The bounds for the auction are the duration it is expected to last for and the capacity of tokens to sell.
Fixed Price Auctioneer
Fixed Price Auctioneer is the simplest auction variant. It allows creators to buy/sell a set capacity of token at the quoted price for a certain amount of time. It is similar to a limit order in an order book exchange.
Oracle-based Auctioneers
The Oracle-based Auctioneer contracts allow market creators to create bond markets that use external price feeds to stay in line with market prices.
Oracle Fixed Discount Auctioneer (OFDA)
The Oracle Fixed Discount Auctioneer allows market creators to sell tokens at a discount to a price provided by an oracle, likely in exchange for vesting the tokens over a certain amount of time. Typically, longer duration vesting will require a larger discount. Additionally, larger discounts may be required for smaller cap tokens or when market demand is low.
Oracle Sequential Dutch Auctioneer (OSDA)
The Oracle Sequential Dutch Auctioneer implements a simplified sequential dutch auction pricing methodology which seeks to sell out the capacity of the market linearly over the duration. We do so by implementing a linear decay of price based on the percent difference in expected capacity vs. actual capacity (relative to the initial capacity) at any given point in time.