Basis Dollar tokens are designed to be used as a medium of exchange. The built-in stability mechanism expands and contracts their supply, maintaining their target peg of $1.
BSDS loosely represents the value of the Basis Dollar network. Increased demand for Basis Dollar results in new BSD tokens to be minted and distributed to BSDS holders, provided that the Treasury is sufficiently full at a given point in time.
Holders of BSDS tokens can claim a pro-rata share of BSD tokens accumulated to the Seigniorage Stake contract.
Basis Dollar Bonds are minted and redeemed to incentivize changes in the Basis Dollar supply. Bonds are always available for purchase to BSD holders, however, BSDB purchases are expected to be made only while BSD trades below $1. When the price of 1 BSD is above 1$, holders are able to exchange their BSDB to BSD tokens in the Basis Dollar Treasury. Upon redemption, they are able to convert 1 Basis Dollar Bond to 1 Basis Dollar, earning them a premium on their previous BSDB purchases.
Contrary to Basis Bonds of basis.io and Coupons in Empty Set Dollar, bonds in Basis Dollar do not have expiration dates. All holders are able to convert their bonds to Basis Dollar tokens, as long as the Treasury has a positive BSD balance at a given point in time.