Minting

What is minting?

Minting is the secondary value accrual strategy of PirateDAO. When users mint JOLLY tokens, they are actually selling their assets in order to buy a bond from the protocol. Minting Actions are a cross between a fixed income product, a futures contract, and an option. The protocol quotes the minter with terms for a trade at a future date. These terms include a predefined amount of JOLLY the minter will mint and the time when vesting is complete. The bond becomes redeemable as it vests. I.e. in a 5-day term, after 2 days into the term 40% of the rewards can be claimed.

Minting is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders mints discounts more or less unpredictable. Therefore minting is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

Allowing users to purchases bonds thorugh Minting allows PirateDAO to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since PirateDAO becomes its own market, on top of additional certainty for JOLLY investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.

The Pirate Bond

The Pirate Bond will always have better discount than classic bond. With this bond, it will only be possible to stake. It will no possible to claim directly your token, you have to stake first and unstake if needed.

Bonding fees

A 10% fee is applied to any deposit in the bonds, which means that, if you buy 10 $JOLLY through a bond, 1 $JOLLY will be minted and will go in the Dev Wallet, allowing the team to be paid by selling these tokens. Keep in mind the team can sell these tokens whenever they want if they need money for expenses such as salaries or marketing fees.