to be rebalanced soon? Looks like a deep depeg down to $0.90
Why would the protocol rebalance it. It’s whatever the market decides. It’s redeemable in 2026 and you can get a discount on buying now.
One reason the protocol may choose to rebalance is because it provides a deeper level of security in the product and provide the liquidity to ensure holders can sell if need be. Presumably it was orginally seeded by the protocol in the first instance? Why was this if its only the market that decides? Tradfi pricing of bonds is very efficient with only the time discount priced in with little to no speculative premium baked in to the price. I get the point that there is premium for an individual user, similar to when we saw LSDs depeg at the end of 2022. But if an individual can take advantage of the discount why wouldn't the protocol also take advantage of the mispricing and make a profit?
What do you think the bond should be priced at?
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