BAG Holders Will Receive Their First Payouts in USDC This Month. Here Are The Details

BondAppetit acquired its first bonds for securing backing of the USDap stablecoin in early August. The first payout of the coupon yield on Xerox bonds took place on August 15, and we will start distributing these funds among token holders in the near future.

In the previous article, we explained the mechanisms governing the BondAppetit economy during the second launch phase and how passive income will be distributed among BAG token holders. However, a few details were left out and we will be explaining them below.

TL:DR

• yBAG is an interim token for collecting passive income and at the same time retaining the right to vote.
• Upon early exit from the staking contract, the token holder loses 50% of the income accumulated over the entire duration of staking.

How can I earn income on BAG and still retain the right to vote?

To collect passive income, you have to stake your BAG tokens in a special contract for 3, 6 or 12 months. The longer the staking period — the higher the share of income. This is beneficial for all parties involved, as the tokens are withdrawn from the market and their holders receive profits as passive income.

The problem is that staking tokens keeps you out of participating in the protocol governance throughout the staking period. This goes against our goal of building a truly decentralized protocol. Genuinely decentralized protocols are valued higher on the market and are also less vulnerable to state regulation. In recent months, the financial authorities of the United States and Europe have made it clear that the tokens of insufficiently decentralized crypto projects can be equated to securities.

We have developed a solution that allows you to retain the rights to vote along with the opportunity to stake your BAG token and receive coupon incomes. BAG token holders will be able to choose one of two options:

• If you want to retain your right to vote, then you can deploy a personal contract that exchanges your BAG tokens for interim yBAG tokens and delegates the votes of the BAG tokens to your wallet. Next, you can stake the yBAG tokens on a contract that distributes income from bonds. Under this scenario, you pay for the deployment of the contract and retain the right to vote.
• If you do NOT want to retain your right to vote, you can simply convert your BAG tokens to yBAG tokens and stake the yBAG on the contract that distributes the income from bonds. In this scenario, you do not incur any additional expenses for deploying your personal contract.

The yBAG token is just a technical representation of the BAG token. The yBAG token cannot be transferred to other users, but will only be used for staking and can be converted back to BAG at any time at a 1:1 ratio.

How much do I get for early contract exit?

The income from staking is accrued for each block. You can exit the contract at any time, but if you leave during a lockup period, you will lose 50% of all accumulated income. The retained 50% is channeled back into the contract and distributed among current stakers, increasing overall returns. You can exit without losing 50% of your income one week before the end of the staking period. If you do not withdraw their tokens during the set period, the token lockup is extended for the next period.

Example. An investor staked their BAG tokens for 3 months, and then for another 3 months. The smart contract must accrue 100 USDC to the investor for each period, or 200 USDC in total. The investor then suddenly decided to withdraw early from the staking contract at the very end of the second period. In this case, the investor will receive around 100 USDC, or half of the amount that could have been gained had patience been exercised. The other half of the income will be returned to the common pool and will increase the total APY for its remaining participants.

At first, payouts will be made in USDC. The payment method will be switched to USDap in the future. Why not right away? At the moment, the market for USDap is still small. Excess USDap supply will negatively affect the exchange rate of the stablecoin.

Links

Website: https://bondappetit.io/
Whitepaper: https://bondappetit.io/whitepaper
Litepaper: https://bondappetit.io/static/media/bondappetit_litepaper.pdf
Dev docs: https://bondappetit.io/docs/
News channel (EN): https://t.me/BondAppetit
Chat EN: https://t.me/BondAppetitEn
News channel (RU): https://t.me/BondAppetitRuNews
Chat RU: https://t.me/BondAppetitRu
Twitter: https://twitter.com/DeFiBonds