Bingo Bonds (bBGO) help to incentivize changes in BGO supply during both epoch expansion and contraction periods. For starters, the exchange rate for BGO to bBGO is 1:1, but bBGO to BGO ratio is dependent upon the mechanism as described down below. When BGO's TWAP falls below 1 $BUSD peg, bBGO gets issued and can be bought with BGO at its prevailing price. Doing so takes BGO out of its circulating supply.
bBGO does not have expiration dates. All holders are able to redeem their bBGO for BGO tokens as long as the Treasury has a positive BGO balance, which typically happens when the protocol is in epoch expansion.
bBGO (bond tokens) are always on sale, however, a purchase during epoch expansion will result in a net loss. Hence, the platform UI only allows for purchase of bBGO when BGO falls below the 1 $BUSD peg.
Early redemption of bBGO bonds for BGO (when BGO's TWAP < 1) will experience a 10% net loss. e.g. if BGO's TWAP < 1, exchange bBGO bonds for BGO will be in a 1:0.9 ratio.
To encourage redemption of bBGO bonds for BGO when BGO's TWAP > 1 and incentivize profit-seekers who are doing bonds. Bonds redemption will be more profitable with a higher BGO TWAP value. Bonus for redeeming Bonds to Cash is a ramping up bonus, not a fixed bonus and is capped at 30% maximum.
Buy bBGO: 1 BGO = 1 bBGO Redeem bBGO: If BGO < $1; ---> 1 bBGO = 0.9BGO (10% penalty) If BGO > $1; ---> 1 bBGO = [price] BGO (max bonus 30% achieved at $1,3)
As you can tell, bBGO holders are able to profit more when they participate in bonds redemption when BGO TWAP >> 1.