TWO (Time Weighted Offering)

The Basics of Bonding

Bonds serve as a mechanism to facilitate the issuance of vested tokens in exchange of the acquisition of assets that help to build a treasury. In this market, participants exchange one asset (known as the quote token) for another vested asset (referred to as the payout asset) at a specified discount. To encourage users to engage within the bond markets instead of the open market, payout tokens are offered at a reduced rate. Additionally, these tokens come with a vesting period to discourage users from immediately selling the discounted tokens for a quick profit. These mechanisms are designed to align the interests of issuers and bonders effectively.

Time Weighted Offering (TWO)

Time Weighted Offering is used to issue veCHI (locked CHI) in exchange for other assets. Through this mechanism, market participants exchange a quote token (e.g., ETH and stETH ) for veCHI at a specified discount. To encourage users to participate within the TWO market instead of the open market, CHI is offered at a lower price compared to its normal cost. Moreover, these tokens come with a lock-in and vesting period to disincentivize users from immediately selling the discounted tokens for a quick profit. The minimum lock-in period is 4 weeks and the maximum is four years. The vesting period is period is dynamic and contingent on the lock-in period (vesting period = lock-in period * 2). Furthermore, the maximum obtainable CHI discount is capped at 50%, and the formula used to calculate the user-specific discount considers the lock-in period.

The discount formula determines the amount of CHI the user receives. The obtained CHI is then locked using the same lock-in period from the above formula, and the user finally receives veCHI. During the locking period, TWB market participants earn LSTs yield and CHI incentives. Furthermore, they can participate in governance to shape the future of the Chi Protocol.

The governance will make different phases of TWO with pre-set lock-in periods and limited number of available CHI tokens. Please check our medium to be updated on the last phase.

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