General

What is Chicken Bonds?

Chicken Bonds introduces a novel bonding mechanism [see Whitepaper] which allows protocols to bootstrap liquidity at minimal cost and provides better user protection than existing bonding alternatives. The bonding mechanism can be applied to yield-bearing tokens. We have implemented an initial version for Liquity’s stablecoin LUSD on mainnet Ethereum (aka LUSD Chicken Bonds).

What is LUSD Chicken Bonds?

The launch of the LUSD Chicken Bonds introduces a new, innovative form of bonding to decentralized finance. LUSD Chicken Bonds will offer an amplified yield-earning and trading opportunity for LUSD holders while helping to stabilize the price of LUSD and improve its liquidity.

We're excited to take this game-theoretic experiment to mainnet while also pioneering Dynamic NFTs which will evolve based on the user’s interactions.

Why did we build LUSD Chicken Bonds?

If you've been following Liquity for a while, you are aware that we are not the kind of team that will chase innovation for the sake of it. The Liquity protocol itself is the perfect example. While similar to Maker/SAI, its infrastructure is quite different and improved at every level leading to a new type of product. And we're proud that Liquity proved itself as the most resilient and efficient borrowing protocol and stablecoin on Ethereum.

With Chicken Bonds, we're tackling a different playing field with a similar approach. Here, the aim is to enable protocols to bootstrap liquidity at a minimal cost. We have created a unique bonding model which is gamified and provides better guarantees and less downside for users than existing bonding approaches. Bonders will benefit from principal protection: they always have the option to “Chicken Out“ (hence the name of Chicken Bonds), canceling their bond and claiming their principal back.

What’s in it for users?

Today, every user earns the same APR in the Stability Pool. Chicken Bonds will open up new earning and trading strategies for the expected future yield of the Stability Pool. Users will be able to bond to receive a bLUSD token. It captures an amplified, auto-compounded yield, which they can either hold or trade.

Chicken Bonds will not only be more engaging because of those new strategies but will also reward users with unique Dynamic NFTs - these are on-chain generative NFTs that change their visual representation based on the users' actions.

What makes these generative NFTs unique is their dynamic nature: the NFT visual will either be an egg (while bonding), a chad chicken (after claiming the bond - “Chickening In”) or a run-away chicken (after canceling the bond - “Chicken Out”). The most chad Chicken Bonders and engaged users in the Liquity ecosystem will get the rarest NFT. We are excited to join forces on the NFT side with the artist Luchador, creator of the eponymous collection and Play 2 Earn game.

The Chicken Bonds NFT collection is exclusively tied to the DeFi application. The only way to mint one is to create a bond. We invite DeFi degens and NFT maniacs to partake in this first of its kind event, where your financial decisions will shape the NFT collection you will end up with. “Participate 2 Earn” your Dynamic NFT!