# Bonds

A **Mesh Bond** (REQ-021, vision §17) is a [Stand](stands-guilds.md)-issued
instrument that pays a **coupon** to its holder over a term and returns the
principal at maturity. The coupon is bounded by a **mission-locked cap and
floor**: 8% upper cap, 0% floor (locked `CouponCapBps = 800` and
`CouponFloorBps = 0` in `x/bond`). The cap exists so the mesh cannot become a
speculative market; the floor exists so the coupon cannot go negative.

## The coupon clamp

The coupon is clamped to `[floor, cap]` by the `Clamp` helper in `x/bond`
(same shape as the [Fee Covenant](../shared/six-principles.md) clamp): a
coupon above 8% is reduced to 8%; a coupon below 0% is raised to 0%; a coupon
in range is unchanged. The clamp is a tested invariant: below floor → floor,
above cap → cap, in range → unchanged. This is the Mission Lock's expression
in the capital layer.

## Why a cap

OpenYield is a public-good mesh for **real production**, not a speculation
engine. An uncapped coupon market would let a Stand offer arbitrarily high
coupons to attract Bread, turning the mesh into a speculative race. The 8%
cap bounds the coupon at a level consistent with real production returns, and
the [Mission Lock](councils-voice.md) makes the cap non-amendable — no Council
vote can raise it. The mesh says **coupon** and **real return**, never the
passive-value or standalone-metric words banned by the
[lexicon](../shared/lexicon.md).

## The bond lifecycle

A Bond moves through five states (locked `BondStatus` enum in `x/bond`):
Issued → Active → Matured, with Defaulted and Repaid as terminal paths. The
issuer is a Stand (referenced by stand-id); the principal is denominated in
[Grain](../shared/bread-scale.md). The bond market is governed by the
[Stand Council](councils-voice.md) for the issuing Stand.

## Coming in v0.3 P5

v0.3 P5 (REQ-026) extends the bond market with **Growth Bonds** (a coupon that
grows over the term, still clamped to the 8% cap) and a **secondary market**
(Buy/Sell orders on issued bonds). The 8% / 0% consts are unchanged — the
D-028 regression firewall guarantees v0.3 cannot alter the v0.2 mission-locked
ceiling. See [Partner Spectrum](partner-spectrum.md) for how Partners relate
to the bond market, and [Anchor Preview](anchor-preview.md) for the
institutional tier.