# Discounts

## How Discounts Work

Bond discounts represent the percentage of market price you pay:

| Discount | You Pay    | Market Price $100 |
| -------- | ---------- | ----------------- |
| 100%     | Full price | $100              |
| 90%      | 10% off    | $90               |
| 85%      | 15% off    | $85               |
| 75%      | 25% off    | $75               |

Lower percentage = better deal for you.

## Dynamic Pricing

Discounts aren't fixed. They adjust automatically based on:

{% stepper %}
{% step %}

#### Protocol Liquidity Needs

| Condition                   | Effect on Discount                         |
| --------------------------- | ------------------------------------------ |
| Low liquidity (need more)   | Deeper discount (attract bonders)          |
| High liquidity (sufficient) | Shallower discount (less incentive needed) |
| {% endstep %}               |                                            |

{% step %}

#### Bond Demand

| Condition                  | Effect on Discount |
| -------------------------- | ------------------ |
| High demand (many bonders) | Discount narrows   |
| Low demand (few bonders)   | Discount deepens   |
| {% endstep %}              |                    |

{% step %}

#### Network Debt Ratio

| Condition        | Effect on Discount          |
| ---------------- | --------------------------- |
| High debt ratio  | More conservative discounts |
| Low debt ratio   | More aggressive discounts   |
| {% endstep %}    |                             |
| {% endstepper %} |                             |

## The Algorithm

The bonding contract calculates real-time discount based on:

```
Discount = Base_Discount × Adjustment_Factor

Where:
- Base_Discount = Period-specific floor (75/80/85/95%)
- Adjustment_Factor = Function of (liquidity, demand, debt ratio)
```

This creates a self-balancing market:

* When protocol needs liquidity → discounts attract bonders
* When liquidity is sufficient → discounts reduce, fewer bonds

## Reading the Discount

In the dApp, you'll see:

```
Current Discount: 82%
You Pay: $82 per PRO
Market Price: $100 per PRO
Your Savings: $18 per PRO (18%)
```

## Timing Your Bond

Should you wait for better discount?

Consider:

* Discounts fluctuate — today's rate may be better or worse tomorrow
* PRO price also moves — discount on higher price may cost more than no discount on lower price
* Opportunity cost — while waiting, you're not earning rebase

General approach:

* If discount meets your threshold, consider acting
* Don't try to time perfectly — you'll likely miss
* Focus on whether the deal works for your goals

## Discount Limits

Each period has a floor (best possible discount):

| Period   | Floor | Meaning         |
| -------- | ----- | --------------- |
| 90 days  | 95%   | Maximum 5% off  |
| 180 days | 85%   | Maximum 15% off |
| 360 days | 80%   | Maximum 20% off |
| 540 days | 75%   | Maximum 25% off |

Discounts won't go below these floors regardless of conditions.

## Example Scenarios

### Scenario A: High Demand

* Many users bonding
* Protocol has sufficient liquidity
* Discount: 95% (minimal)

### Scenario B: Low Demand

* Few users bonding
* Protocol needs liquidity
* Discount: 78% (attractive)

### Scenario C: Market Stress

* High volatility
* Debt ratio elevated
* Discount: 88% (moderate, conservative)

## Checking Live Rates

Always check current discount in the dApp before bonding:

{% stepper %}
{% step %}

### Navigate to Bond section

{% endstep %}

{% step %}

### Select period

{% endstep %}

{% step %}

### View current discount rate

{% endstep %}

{% step %}

### Calculate your effective price

{% endstep %}

{% step %}

### Decide if it meets your criteria

{% endstep %}
{% endstepper %}

## Related

* [How Bonds Work](broken://pages/7f56e4bf7f45111df37fceeef8b21220acc661ef)
* [Bond Types](broken://pages/b545457a5b43b91297c87974c28b98821147c50b)


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