Hello and welcome to this Hydranet article! Today we want to explain what bonds are, why we think they are beneficial, and how to buy them. Disclaimer: Before we begin, please understand that nothing in this article is financial advice. American citizens are not allowed to buy bonds.
What are bonds?
Bonds are an investment method by which an investor can buy tokens without any slippage directly from the app website.
In this case, the bonds are discounted HDX that everyone can buy and build up the treasury by this. The HDXs only get minted if someone actively buys the bond. The Treasury will be used for supporting HDX price and Hydranet development, eg by farming some allocation to generate a passive cash flow, paying and expanding the current dev team, etc. .
Currently, we have wETH and DAI bonds. These bonds allow you to buy HDX for around 5–10% less than the current market price; your purchased HDX is automatically staked and can be claimed as either sHDX or gHDX after 7 days, referred to as the “vesting period”.
What are the benefits of having bonds?
One of the major benefits of bonds is that the money goes directly to the team: by purchasing bonds, users can support the project directly, as the proceeds don’t go to the exchange or another user. The team has already earmarked the first USD 100,000 to build a treasury that will directly support the MCLW/DEX team. By building a treasury through the sale of bonds, the team doesn’t have to sell tokens in the market to cover ongoing costs, which helps support the market price of HDX.
Another benefit of bonds is that any new or recurring investors can purchase tokens at a discounted price. The vesting period exists to prevent bad actors from immediately dumping their discounted tokens, which would significantly drive down the market value of HDX. Currently, we have a vesting period of five days, although this can be adjusted as the need arises.
It also empowers Hydranet as a DAO (decentralized autonomous organization). Because the money doesn’t get paid directly to the team, but to the multisig holders first instead. These people can then decide with the community by creating snapshot proposals on how they can support the team or DEX. Once the snapshot voting is finished, the multisig holders will act accordingly to the result.
We believe this is a win-win situation, for the team, the community, and the investor.
Where can one buy bonds?
HDX bonds are only available at https://app.hydranet.ai/#/bonds
Before you buy, make sure you have DAI or wETH in your wallet (what you will be using to purchase HDX) and some aETH (to cover the gas fees; 0.0003 should be enough). Next, make sure your wallet is currently using the Arbitrum network. Then head over to the website and connect your wallet. Now you can purchase the HDX bonds by clicking “Bond” and then confirming the transactions in your wallet.
If you don’t see a live bond right now, it may be that this week’s bonds have already been sold out as we have a 5000 USD limit per week for now.
Once you have purchased a bond, you will have to wait 7 days until you can claim the HDX. New bonds are auto-staked (accrue rebase rewards) and no longer vest linearly.
Just simply click “Claim” at the end of the term.
Note: The proceeds will go, as stated above, to the DEX developments. You can track the treasury currently here: https://arbiscan.io/address/0x18ebbEba2c098a0cAE227cd0309eCf976e4Ed245