# Bonding ## Overview/What Are Bonds? Through the use of bonds, users can mint new NMSP tokens at a discounted rate by exchanging them against liquidity tokens (LP tokens) or other stable assets. Bonds have different vesting terms over various time intervals, and they are accumulated in real time within these terms. Liquidity bonds enable the protocol to accumulate and lock up liquidity, while stable bonding allows the protocol to expand its treasury holdings. Furthermore, Auction Bounding ensures the stabilization of the 90-day moving average determined with a Range-Bound Stabilizer. Nemesis PRO bonds are an essential tool for the protocol that allows various tokens to be exchanged over a specified period of time at a price determined by the market. This means that the pricing of the tokens does not depend on any third parties. ## How Does It Work? Users who purchase bonds make a certain amount of deposit upfront in exchange for the potential to receive a predetermined return of NMSP upon maturity. The profitability of the Bond is unpredictable, as it is dependent on the market price of NMSP when it reaches maturity. Bond payouts are determined by the bond's current discount rate. The bond is priced lower than the market rate when the discount rate is positive. Conversely, when the discount rate is **negative**, the bond is priced higher than the market rate. Therefore, the discount rate is a crucial factor when considering the potential return on a bond investment. The variable discount rate of a bond market is a self-regulatory mechanism that adjusts supply in response to demand. This adaptive approach helps to ensure that the bond market maintains a steady supply over a predetermined period of time, providing an equitable distribution of bonds in the marketplace. \ \ Nemesis PRO offers 3 different types of bonds for different scenarios and approaches, which are Stable Bonds, Liquidity Bonds, and Auctioned Bonds. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://nemesisdao.gitbook.io/whitepaper/basics/bonding.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.