# Liquidity Bonds

### Overview

Liquidity Bonds let you add BNB to FEG liquidity through a fixed-term LP position.

When you mint a bond, you deposit BNB. The bond matches that value with FEG at a **1:1 value ratio** to form the LP position.

The bond matures after **12 months**. After maturity, you can withdraw the LP position and any eligible income generated during the term.

### Bond terms

* **Match ratio:** 1:1 by value between deposited BNB and paired FEG
* **Term:** 12 months
* **Withdrawal:** Available after maturity

### How Liquidity Bonds work

1. Deposit any amount of BNB.
2. The bond pairs that deposit with an equal value of FEG.
3. The combined assets form the LP position for the bond term.

**Example:** Deposit **1 BNB** and the bond adds **1 BNB worth of FEG** to create the LP position.

### Potential outcomes

Your final result depends on market conditions during the bond term.

Key factors include:

* **FEG price movement**
* **Trading volume**
* **LP income** earned from swap activity

If trading volume stays active, the LP position can earn additional income during the term. If FEG price changes significantly relative to BNB, the value of the LP position can also change.

### What happens at maturity

After the 12-month term ends, you can:

* Withdraw the LP position
* Keep the LP position to continue earning LP income
* Remove part or all of the LP to realize gains or rebalance exposure

{% hint style="warning" %}
Because your BNB will be placed in a liquidity pool, the position can be affected by **impermanent loss**.

LP returns are not fixed. Results depend on price movement and trading activity during the bond term.

Read [Impermanent Loss Explained on Binance Academy](https://academy.binance.com/en/articles/impermanent-loss-explained) before participating.
{% endhint %}


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