Xenophon Docs
Calculation Formula
Calculation of bond price:
bondPrice=1+(debtRotioBCV)bondPrice = 1 + (debtRotio *BCV)
The intrinsic value of XPH is 1 BUSD, which is roughly equivalent to 1 USD. To profit from the bonds, Xenophon charges a premium for each bond, which is derived from the system's debt ratio and BCV, with a higher BCV implying a lower bond discount and higher agreed inflation. A lower BCV means a higher discount to the guarantor and a lower agreed inflation rate.
debtRatio=bondsOutstanding/xphSupplydebtRatio = bondsOutstanding / xphSupply
The debt ratio is the sum of all XPH commitments to guarantors divided by the total supply of XPH. This allows us to measure the system's debt.
bondPayoutreserveBond=marketValueasset/bondPrice bondPayoutreserveBond=marketValueasset/bondPrice
For reserve bonds, the bondholder provides the market value of the asset used to determine the bond payment. For example, if the user provides 1,000 BUSD and the bond price is 250 BUSD, the user will receive 4 XPH.
For liquid bonds, the market value of the LP tokens provided by the bondholder is used to determine bond payment. For example, if a user provides 0.001 XPH-BUSD LP tokens that are worth 1,000 BUSD at the time of binding and the binding price is 250 BUSD, then the user will receive 4 XPH.
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