What are bAssets?

Bonded Assets (bAssets) are liquid, tokenized representations of staked (bonded) assets in a PoS blockchain. They allow stakers to gain liquidity over their staked assets, allowing them to utilize the locked value in staked assets in financial applications such as Anchor.

bAsset tokens usually represent a staked asset position, in which stake rewards are distributed to its holders. Applications that use bAssets can incentivize adoption with distributed rewards.

In addition, assets should be fungible across all staking positions, regardless of what the underlying validator is and what their properties are.

As a result of having multiple bAsset types on a single blockchain, the liquidity is fragmented, reducing their attractiveness as collateral.

bAssets should be fully redeemed within a predetermined time frame. Holders should be able to redeem their assets without significant loss. So, the holder of a bAssets should not suffer a loss if the asset is redeemed.

bAsset rewards are used to fund Anchor's deposit rate subsidies. The rewards should be given out without interruption, because subsidies must be distributed continuously.

Bonded LUNA (bLUNA) :

bLuna tokens are bAssets built for the Terra blockchain, their value backed by underlying Luna delegations. With full compliance with the Cw20 standard, bLuna tokens can be integrated into a wide range of decentralized finance applications.

bLuna tokens are used as collateral to borrow Terra stablecoins from Anchor. In bLuna, the exchange rate of conversion is used when the currency is minted or redeemed.

When a bLuna is created, the amount of bonded Luna per bLuna in existence is 1, and decreases with each slash.