Issuance

At the start of each voting period, bonds are posted. Given bonds are posted with only ~6 days of accrued tax, bonds are effectively under-issued.

The total value of the week's bonds are set to 50% of the moving average of the DAO's collected tax pool over the current and previous weeks, but not to exceed the current era's tax pool value (previous week + current week / 4). Below is an example of how bonds would be issued within the first month of operation,

Week 1: $10,000 of taxes accrued

• No QBs issued, not enough data.

Week 2: $15,000 of taxes accrued

• $6,250 of "W-002" QBs issued, maturing after sale of "W-002" assets

Week 3: $10,000 of taxes accrued

• $6,250 of "W-003" QBs issued, maturing after sale of "W-003" assets

Week 4: $20,000 of taxes accrued

• $7,500 of "W-004" QBs issued, maturing after sale of "W-004" assets

QBs are issued as ERC-721, such that users can freely trade bonds on secondary markets, between personal accounts, or users. QBs reach maturity approximately one week after issuance and cannot be redeemed for any amount prior to maturity. This is where secondary markets can thrive.

In order to protect lenders' funds, losses to initial capital are paid in market-rate $QD such that the full redeemable value is always realized, which can also benefits the protocol to re-balance net-ownership while satisfying bond holders' expected returns.

In cases where the DAO's investment profits exceed more than double that of the bond rate (e.g. +5% on normal 2.5% bonds), 50% of the excess profit is realized as an additional "bonus" payment to the bond holder. The remaining 50% is reserved for stakers.