Intro LUSD Chicken Bonds Testnet Version

Chief Hen

September 29, 2022

We want to prepare our users for the LUSD Chicken Bonds launch on October 4th, by giving everyone access to the test-game version.

This instance will be similar to the real version, just sped up to obtain results faster - 1 day in the game will be like 24 days in the real life version (so 1h is 1 day in the game).

The test-net version will be close the final one with a couple exceptions:

The liquidity management will be done directly on Curve and not a part of the frontend
The ‘Chad Chicken’ and ‘Runaway Chicken’ NFT’s will be added (test game only displays eggs)
Parameters of the Chicken Bonds system might change

Also, the game dynamics will change once real money is involved so keep that in mind.

We hope you’ll enjoy the game and come out with a fine-tuned strategy for mainnet next week!

Your Goal & Strategies

Try to find a winning strategy that outperforms your peers and maximizes your yield amplification.

See our post and videos for more in depth information (intro post, strategies post and video). Here is a brief summary:

Why bond?

You get bLUSD which gives you access to an amplified yield compared to depositing your funds directly into the Stability Pool

Why is bLUSD valuable?

It can be redeemed against the Reserve which holds most of the bonded LUSD. It receives all the yield from users bonding as well the entire POL

When should you Chicken In?

Once you have reached the break even point - meaning your accrued bLUSD is worth more (at current market prices) than the LUSD which is bonding. Make sure you are still profitable after swapping and then rebond to compound your amplified yield.

Are there other strategies than bonding?

Trade bLUSD: Buy it when it’s close to the redemption price, and sell when there is a high premium

Be an LP: Provide liquidity in the LUSD/bLUSD and maximize profits by providing the asset that is in demand to the pool (Curve rewards you for that)

Be an NFT collector: In our test game the NFTs will be minted randomly - without taking into account on-chain metrics to increase your chances for rare NFTs ;-(

Preparation

Get some Goerli ETH: you can obtain it from this faucet.

Instructions

Head over to: https://devui.liquity.org/next/#/.
Change your network to Goerli and connect your wallet.

You will be presented with a familiar Liquity frontend but with 2 changes - a new panel and a button.

Go to the ‘Bonds New’ tab, and claim your free 10k LUSD with which you will play the game

Once you have it, you are ready for the game.

Create bond

The first action is to create a bond, you can:

Create one big bond
Create several small ones
Leave some LUSD on the side to LP early (earn trading fees)
Leave some LUSD to arb and/or trade
Some other strategy…

The minimum amount to create a bond is 100 LUSD.

After clicking on ‘Create bond” you should enter the desired amount and can also use a slider to simulate the return rate based on the bLUSD market price.

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Based on the bond’s status it will appear under pending, claimed or canceled.

As your bLUSD accrues you will have to decide if you want to:

Wait until in profit, claim, sell for LUSD and rebond with a higher principal
Claim before break even and be an early LP benefiting from trading fees
Keep LUSD and bLUSD in your wallet, monitor the price to arb/trade and benefit from price fluctuations