Blockquote This has been addressed in AIP3: AIP3: Automated Bond Redemptions - #10 by enamakel Where bond redemption should happen in a pool
What I proposed is not just an automated bond redemption, but one that involves an auction where the ARTHB holder line up based on how much of their bond discount they want to forgo so they can get their redemption first. This will also allow the more efficient servicing of debt since people are willing to accept less. Those who are patient will receive the full bonus for their bond purchase.
Blockquote This is a great idea however we want to encourage the system to actually get rid of it’s debt rather than increase it. So an addition would be to only enable the rewards in this pool only if we are in the contraction phase.
Staking ARTHB will only be allowed as you wait for your turn in the queue for redemption. It doesn’t change the amount of debt that exists at all. It just rewards bond holders and encourages the purchase of bonds. We want to make buying bonds more attractive without increasing the discount, which will increase the cost of debt servicing.
Blockquote Yes correct, we need to not only make bond purchasing gradual and linear, but should also figure out ways to punish whales that are looking to dump on bond purchasers.
All ecosystems will have whales, and as your project grows, you’ll attract bigger whales. Whales shouldn’t be seen as the problem. They just reveal the flaws in the way incentives and the system were designed. Adjusting how the funds from bond purchases go to buy back ARTH to smooth out the price spikes will remove the opportunity to buy and dump.