> For the complete documentation index, see [llms.txt](https://aicrostrategy.gitbook.io/main/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://aicrostrategy.gitbook.io/main/aicrostrategy/model/convertible-bonds.md).

# Convertible Bonds

## What are convertible bonds

Picture it as an arranged agreement:

* You **lend** AicroStrategy a certain amount of stablecoins (say, USDC) for a set period.
* You **lock in** a future strike price at which you could acquire $AiSTR.
* If $AiSTR’s market value climbs above that price when the bond matures, your stablecoins **convert** into $AiSTR at the lower, locked-in rate.
* If it doesn’t climb, you simply get back your stablecoins.

## Example:

1. **Carla’s Deposit**\
   Carla holds 2,000 USDC and hears about AicroStrategy’s convertible bonds. Instead of buying $AiSTR outright (where she’d face every price swing), she opts to deposit her USDC in a 6-month bond.
2. **Strike Price**\
   Taking an example where the bond strike is set at 15% above $AiSTR’s current price. So if $AiSTR trades at $1.00 now, her strike is $1.15.

* If $AiSTR goes above $1.15 by maturity, Carla’s stablecoins morph into $AiSTR at that $1.15 rate.
* If $AiSTR doesn’t pass $1.15, she reclaims her 2,000 USDC.

**Treasury Support**\
AicroStrategy promptly deploys Carla’s USDC to purchase more **Bitcoin**, adding to the treasury that underpins $AiSTR’s value. The bigger the BTC treasury, the stronger the potential for $AiSTR (that’s the idea, anyway).

3. **Maturity Day**

* If $AiSTR soared to $1.50, Carla’s bond automatically converts at $1.15. She effectively “buys” $AiSTR at below-market prices, scoring a potential gain.
* If $AiSTR lags and sits at $1.05, she simply redeems her 2,000 USDC.
* There’s no nerve-wracking day-to-day guesswork—just a yes/no final outcome at maturity.

## Key Benefits

1. **Upside with a Safety Net**\
   You’re not all-in on $AiSTR’s volatility. If the token booms, you convert at a favorable rate. If it doesn’t, you keep your stablecoins.
2. **Continuous BTC Accumulation**\
   Every USDC deposit helps AicroStrategy buy more BTC—this synergy supports $AiSTR’s potential.
3. **Simple Redemption**\
   Once the bond matures, redemption is straightforward: either you convert to $AiSTR or reclaim your stablecoins.

## Tldr;

* Gain if $AiSTR rises; get your USDC back if it doesn't.
* Every USDC deposited helps buy more BTC, reinforcing $AiSTR's strength.