ABI-DAI LP Bonds: What, How, Why?

The What?

ABI-DAI LP stands for ABI + DAI liquidity pool pair. If you’re not familiar with liquidity pairs, they are the most fundamental building blocks of how decentralized finance (or DeFi as we affectionately know it) works. Liquidity pools are created with a certain exchange, and allow you to swap one token for the other. In our particular case, the ABI-DAI liquidity pair on Sushi Swap will allow users to pay in DAI and get ABI, or vice versa. This makes sure that you can buy or sell your required token at any time without having to wait for another customer to show up willing to sell your required tokens, at your desired price.

The How?

The process may look scary, but in reality its rather straight-forward.

The Why?

Well, for a number of great reasons:

  • Once the ABI market price goes back above the bond price, you will be able to buy more ABI at a great discount.
  • Bonding LP tokens provides deeper liquidity in the pool and creates more price stability for transactions. As a result, large buy/sell orders have lesser price impact. Users will face less slippage if they place a large order, and holders will see smaller red candles if someone dumps a large quantity of tokens into the market.
  • By bonding liquidity into the protocol, you allow Abachi to earn profits off transaction fees from within that pool, which is a good revenue source for Abachi Treasury. This makes the protocol stronger and increases the backing value of the ABI tokens you hold, thereby making your investment go up in value.

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