Bonds

Bonding is how reserves enter the treasury. You sell an asset to the protocol and receive ARW at a discount to market, released to you over a vesting term.

The trade

| You give | The treasury gives | | --- | --- | | A reserve asset it accepts | Newly minted ARW, at a discount | | Immediately | Vested over the market's term |

The discount pays you for two things: waiting out the vesting period, and carrying the price risk of ARW during it. If ARW falls far enough during vesting, a discounted bond can still end up worse than buying on the open market. Bonding is not arbitrage.

The asset you hand over is not a deposit. The treasury keeps it permanently, and it becomes part of the backing behind every ARW in circulation.

Markets

Each bond is bought from a market — a configured sale of ARW against one specific reserve token. A market carries:

• a capacity, in ARW or in the reserve token, that depletes as bonds sell
• a term, either a fixed number of seconds or a fixed expiry timestamp
• a conclusion time after which it stops accepting deposits
• pricing state that moves with demand

Only the policy role can open or close markets. There is currently one live market, id 0. The Bonds page lists whatever is live at the time you load it.

Pricing

Price is not fixed. Each market has a control variable that tunes how expensive ARW is in terms of the reserve asset, and the depository adjusts it toward a target as the market runs:

• bonds selling faster than the target rate push the price up
• bonds selling slower push the price down

So the discount you see is a function of how much bonding demand has already arrived. It moves between the moment you read it and the moment your transaction lands, which is why deposits take a maximum price argument — if price has moved past your limit, the transaction reverts instead of filling at a worse rate.

Buying and redeeming

1. Open Bonds and pick a live market.
2. Approve the depository to spend the reserve token.
3. Deposit, setting a maximum price you are willing to pay.

The deposit mints a note: a record of how much ARW you are owed and when it finishes vesting. Notes are held per address, and one wallet can hold many.

Vested ARW is claimed by redeeming the note. Redeeming offers to send the payout straight into staking, which mints sARW instead of ARW and starts it earning from the next rebase without a second transaction.

Notes vest continuously — a note halfway through its term can be partially redeemed for roughly half its payout.

Risks specific to bonding

• You are exposed to ARW price for the whole term. The discount is finite; the downside during vesting is not capped by it.
• The discount can compress to nothing. Heavy bonding demand pushes price up. Always set a maximum price.
• Terms are set by governance and can differ per market. Check the term before depositing, not after.