# Bonds

### What are CARAML (Bonds)?

Bonds are unique tokens that can be utilized to help stabilize FUDGE price around peg (1 DAI) by reducing circulating supply of FUDGE if the TWAP (time-weighted-average-price) goes below peg (1 DAI).

### When can I buy CARAML (Bonds)?

CARAML can be purchased only on contraction periods, when TWAP of FUDGE is below 1.

Every new epoch on contraction periods, CARAML are issued in the amount of 3% of current FUDGE circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of FUDGE, no more bonds will be issued.

{% hint style="info" %}
**Note**: CARAML TWAP (time-weighted average price) is based on FUDGE price TWAP from the previous epoch as it ends.  This mean that FUDGE TWAP is real-time and CARAML TWAP is not.
{% endhint %}

### Where can I buy CARAML (Bonds)?

You can buy CARAML if any are available, through the Maintenance tab on our app, anyone can buy as many CARAMLs as they want as long as they have enough FUDGE to pay for them.

{% hint style="info" %}
**Note**: There is a limited amount (3% of FUDGE current  circulating supply) of available CARAMLs per epoch while on contraction periods, and are sold as first come first serve.
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### Why should I buy CARAMLs (Bonds)?

First and most important reason is Bonds help maintain the peg, but will not  be the only measure use to keep the protocol on track.

CARAMLs don't have a expiration date, so you can view them as a investment on the protocol, because longterm you get benefit from holding bonds.

#### Incentives for holding CARAMLs

The idea is to reward CARAMLs buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.

So after you buy CARAMLs using FUDGE, you get 2 possible ways to get your FUDGE back:

1. Sell back your CARAMLs for FUDGE while peg is between 1 - 1.1 (1 DAI) with no redemption bonus. This to prevent instant dump after peg is recovered
2. Sell back your CARAMLs for FUDGE while peg is above 1.1 (1 DAI) with a bonus redemption rate

{% hint style="info" %}
**Note**: The longer you hold, the more both the protocol and you benefit from CARAMLs.
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#### Take note of the following assuming the value of DAI is 60 USD:

{% hint style="success" %}
Example:

1. When FUDGE = 50 USD, burn 1 FUDGE to get 1 CARAMLs (CARAMLs price = 50 USD)
2. When FUDGE = 72 redeem 1 CARAMLs to get 1.105 FUDGE (CARAMLs price = 81.49)&#x20;
   {% endhint %}

### When can I swap CARAML for a bonus?

CARAML TWAP (time-weighted average price) is based on FUDGE price TWAP from the previous epoch as it ends.  This mean that FUDGE TWAP is real-time and CARAML TWAP is not. In other words, you can redeem CARAML for a bonus when the previous epoch's TWAP > 1.1.
