Kronos DAO

Inverse Bonds

What are inverse bonds?

The KRNO token is backed by $1, but as it is not pegged, there remains the possibility of it falling below $1. To prevent this from occurring, we have introduced inverse bonds. Inverse bonds essentially raise KRNO price back up to $1, supporting the price of KRNO when it falls below $1.
Please check the market price. Inverse bond is recommended when the KRNO price is less than $1.

How do inverse bonds work?

The protocol allocates a limited capacity of payout assets, in this case, stablecoins. Users can use the feature by exchanging their KRNO for one stablecoin. For instance, if the price of KRNO is $0.95 (thus lower than $1), the user can buy KRNO from the market and sell it to the protocol for $1. Through this mechanism, KRNO is able to maintain a $1 backing.
The policy team decides the maximum capacity to safeguard the treasury. Funds for the inverse bonds are used from the Treasury Balance.

What is the purpose of inverse bonds?

We are introducing inverse bonds in order to support the price of KRNO and ensure it stays above its intrinsic value of $1.

What is the price of an inverse bond?

The price of an inverse bond is 1KRNO = $1. This price is structured to secure KRNO backing to $1.

What asset will I get for these bonds?

You will receive $1 worth of stable coin for 1KRNO.
The policy team may add and remove bonds or change the payout stable coin assets based on the Treasury Balance and KRNO price.

When and where can I buy inverse bonds?

Inverse bonds have a limited capacity and are sold out once the capacity is reached.
You can buy inverse bonds on the Kronos DAO website using the Klaytn network.

Can these bonds drain the Treasury?

The policy team decides how much KRNO can be bonded in total and allocates the amount of payout assets upfront to safeguard the treasury.
The policy team monitors daily market activities (amount bought and sold) as well as transaction volume and decides on a capacity upfront.