Why would I as a user ever buy and retire carbon through a retirement bond if the total execution price is more than going to Sushi and doing the swap myself? If I have to pay 13k to use a retirement bond or 10k to do it myself, I'm going to just do it myself.
The terminology here may be a bit dense/poorly chosen. We went ahead and used the word fee due to the fact that that is how we represent the fee the treasury pays to the DAO for regular reserve bonds. That fee is not added on top of the price someone would pay for a reserve bond. Additional KLIMA is minted and sent to the DAO instead.
Current token flow for a retirement of BCT from USDC:
- Swap USDC => KLIMA => BCT on Sushi.
- Retire BCT.
End results:
- More USDC in the KLIMA/USDC pool. (more USDC per KLIMA)
- More KLIMA in the KLIMA/BCT pool. (fewer BCT per KLIMA)
- Total KLIMA supply unchanged.
Token flow using a retirement bond:
- Swap USDC => KLIMA on Sushi.
- Provide KLIMA to the retirement bond contract.
- BCT from retirement bond contract is retired.
- 70% of KLIMA received is burned, 30% sent to DAO.
End Results:
- More USDC in the KLIMA/USDC pool. (more USDC per KLIMA)
- No change in the KLIMA/BCT pool. (same BCT per KLIMA)
- Total KLIMA supply reduced by the amount burned.
The end result is instead of swapping KLIMA for BCT in the Sushi pool held within the treasury, you swap directly for reserves. This is only because the reserves are forced to be retired. The same USDC impact is seen on the KLIMA/USDC pool in both scenarios.
In the retirement bond scenario we have also maintained the number of BCT that one KLIMA can buy. This by extension allows reserve bonds to maintain their effectiveness (the more BCT/UBO/etc per KLIMA the more efficient reserve bonds are).
The retirement bonds could be utilize for any order size as long as there is both enough capacity and it is under the max bond amount. The current contract builds on top of the aggregator to perform the retirements as well.