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# Bonds

Purchase bonds on contraction period to get redemption bonus during expansion phase.
LIGHT (bond tokens) are available for purchase when DARK falls below the 1 CRO peg. For starters, the exchange rate for DARK to LIGHT is 1:1.
Every new epoch on contraction periods, LIGHT are issued in the amount of 3% of current DARK circulating supply.
LIGHT (bond tokens) are available for redemption when DARK goes above the 1 CRO peg.
To encourage redemption of LIGHT for DARK when DARK TWAP > 1.1 and incentivize users to redeem at a higher price, LIGHT redemption will be more profitable with a higher DARK TWAP value, of which LIGHT to DARK ratio will be 1:R, where R can be calculated in the formula as shown below:
$R = 1+[(DARK(twapprice)-1)*coeff]$
Where coeff = 0.7
Example:
1. 1.
When DARK= 0.8, burn 1 DARK to get 1 LIGHT (LIGHT price = 0.8)
2. 2.
When DARK= 1.15, redeem 1 LIGHT to get 1.105 DARK (LIGHT price = 1.27)
Contrary to early algorithmic protocols, LIGHT do not have expiration dates and this greatly reduces the risk for bond buyers
LIGHT TWAP (time-weighted average price) is based on DARK price TWAP from the Previous Epoch as it Ends. This means that DARK TWAP is real-time and LIGHT TWAP is not.