QBs are typically issued well below that of the current cycle's tax treasury (in this case, "Week 4" as stated under Issuance), where users can purchase 2.5% rate one-week maturity bonds for a maximum of 7500 $USDC (paired with a $20,000 tax pool), below are four examples of how the DAO handles bond repayments;
Generally positive: The DAO's investment is positive, clearing what's owed to bond holders, earning 3.5% on the asset choices. The bond holders redeem their 2.5% on their original $7,500 as 7687.5 $USDC.
Strong positive: The DAO's investment is strongly positive, earning 8% on the asset choice, the bond holder redeems 7687.5 $USDC as above but with an additional $206.25 of $QD at market value at maturity (see here for a bonus scenario).
Net-negative (A): The DAO's investment under performs what's owed to bonds at +1% cycle profit. The bond holder redeems 7575 $USDC in addition to $112.50 of market-rate $QD. This satisfies the bond holder's expected total value of $7,687.50 of market value at maturity.
Net-negative (B): when strongly negative (in this example, -20%), the user collects 6000 $USDC and $1687.50 of $QD at market rate from the DAO's end of cycle buyback event.
Under each scenario, the post-investment deflationary treasury pool's value greatly exceeds the compensatory payout for bond holders. Even during "Net-negative B" where the weekly investment realizes 20% losses, only 12% is required from the current tax period treasury, still producing a net-deflationary effect on $QD. In this scenario, $QD only becomes net-inflationary for the period in excess of a -55% loss.
