Benefits and FAQ

What are YeetBonds?

• YeetBonds are sales of a token at a discount to market price

• Big holders can sell tokens without having to swap them via the liquidity pool, avoiding slippage and price impact

• Bonds have a discount to the market price of the token. If there is no discount, buyers would buy from a DEX/CEX

• Tokens purchased via a bond have a short unlock period to avoid people instantly arbitraging the price

Why would I use YeetBonds?

• If you are a protocol treasury, you can use bonds to:

  • Raise more cash (stablecoins, or $BERA) after your token is live without crashing the price of your own token

  • Acquire LP tokens of your $TOKEN/$BERA pool, allowing you to own the liquidity in your own pool

  • This allows you to reduce the inflation of your token over the medium and long term (because you can reduce the amount you pay for bribes and/or liquidity mining)

• Acquire strategic assets and diversify your treasury

  • Decentralize the holdings of your token supply

  • Acquire metagovernance tokens such as $BERO or $iRED

  • Benefits are explained further in this article

• If you are a whale/founder/big holder/investor:

  • It can be difficult to exit positions, which is why big holders usually look for OTC (Over The Counter) deals, where tokens are exchanged p2p and not via secondary markets

  • Bonds can be considered a form of permissionless OTC. You can issue a bond, and a greater range of buyers can participate

• If you are a buyer

  • To acquire tokens at a discount to the current market price (after a short lock-up period)

Why are YeetBonds important?

• It gives protocols a useful and accessible way of raising more cash post TGE

• Allows protocols to diversify treasury without having to sell tokens in the liquidity pool or on a CEX

• Allows aligned stakeholders and community members to purchase tokens at a market discount

• It enables protocols to build up Protocol Owned Liquidity

  • This is extremely important in helping reduce the emissions of a protocol’s token in the long term. Usually protocols pay out bribes or liquidity mining incentives to LPs continuously to maintain pool liquidity. These rewards usually get sold by farmers.

  • If a protocol owns its own liquidity, it does not need to pay rent to mercenary LPs

  • Protocols also earn trading fees by owning the liquidity in their pool

• Berachain protocols can farm $BGT, which gives them power in the Berachain gauges and creates another source of revenue from bribes others make to $BGT holders

Practical guidelines for deployers

• Runway: recommended for protocol treasuries to have 6-12 months of runway in stables

• Owning liquidity: healthy liquidity is usually when 60-80% of pool is owned by the protocol, and pool TVL is 10-20% of the token marketcap

• Metagovernance: $iRED or $BERO can help get leveraged bribing power for liquidity incentives

• Should I use a static or dynamic discount on my YeetBond?

  • Use static if you need to sell the tokens quickly

  • Use dynamic if there is no urgency, and this derisks exposure to market fluctuations in token being sold