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==Overview== Normal bonds issued by a government may be considered '''risk-free''' in the sense that they are guaranteed by force of law to pay out as they are advertised. DAOs can issue BOND tokens with similar contracts guaranteeing any fixed payout, which can be assured by self-executing smart contracts, as long as the DAO remains solvent. But contracts based on the REP salary, with pre-determined end dates (so-called fixed-period BONDs) and values don't guarantee a specific value will be paid out. One way to eliminate this risk is to change the expiration date into a variable, so that it doesn't expire until the specified value is paid through the REP salary. However, even this contract still carries risk (as do normal government bonds) in the sense that the interest rate may increase during the tenor of the contract, so the fixed return on the BOND may ultimately have a lower present value than expected. We can eliminate even this type of risk, using the basic REP tokenomics equations. We simply make the lifetime of a BOND token into a variable which is dependent on the actual fees the DAO earns, instead of the expected fees as before. The basic idea is that the variable lifetime <math>L_B</math> of a riskless BOND will grow if the fees shrink or the interest rate increases, and the lifetime will shrink if the fees grow or the interest rate decreases. Technically, a '''riskless contract''' makes the lifetime of the BOND <math>L_B</math> a stopping time of the stochastic process given by the fees and the interest rate <math>r</math>. The smart contract governing the BOND tokens uses the record of fees to determine the expiration date dynamically, which guarantees the present value of the BOND tokens at the time of issuance will be precisely the value advertised. Suppose we wish to pay a developer a bounty worth <math>$b</math>. We can give them <math>q</math>BOND tokens which pay out the same as a REP token would by participating in the REP salary. Our goal is to find formulas determining how large we should set the expiration date <math>L_B</math> given the rate of payout and the value <math>$b</math>. When we pay the developer with <math>q</math> newly minted BOND tokens, which dilutes the total REP in the DAO as fees are now shared with the <math>q+R</math> tokens. The number <math>q</math> of tokens determines the rate of payout, as a larger <math>q</math> means a larger share of the REP salary. The exact rate of payout for <math>q</math> BOND token is proportional to the incoming fees as <math>f'q/(q+R)</math>.
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