By introducing longer bond terms, we could: reduce sell pressure, increase cohmmunity excitement, create equal opportunities while lowering cost of capital. Here is how:
Chart 1 illustrates three scenarios:
a) 30-day staking result
b) 30-day bonding result (2-day term)
c) 30-day bonding result (30-day term)
Chart 1 above illustrates an assumed gain from bonding at 50% higher YTM than staking (about 1% bond discount). The excess yield from bonding over the period is 12.63%. We can also see what a 9.5% discount for a 30-day bond would mean (11.59% excess yield vs staking).
How do these % translate to actual profit for a 🐠 and a 🐳 ?
As chart 2 left side shows above, a regular fishie is basically screwed at any attempt to participate in the 2-day bond market. The 🐳 is however surfing happy at same level with 11.50% excess ROI.
It looks a lot more appealing on the right side of chart 2 however. This is the 30-day bond, providing equally attractive ROI for the whale, but now 🐠 is also swimming happy at a solid 10.81% ROI.
And this benefit is achieved as illustrated above with Treasury giving out only 33% YTM for 30-day bonds vs 34% YTM for 2-day bonds - a reduction in cost of capital by 3%.
At current 2-day terms, all capital is basically liquid and allows a lot of sell pressure. 30-day bonds would take supply off the market instead. Longer term, means higher risk for investors - yes that might drive deeper discounts. But thanks to the 80/20 rule (more like 97/3) and the equalized opportunities we could attract again those 80% people (5x). Gradually though as awareness increases. This 80% group is totally locked out of the game currently and they are not buying any tickets. Open the game for all and we awaken more interest in Olympus again. With mcap/rfv or mcap/backing at historical lows, this is the ideal time for investors to jump at longer term bonds.