Users bond USD in exchange for the protocol's convertible notes, which feature out-of-the-money (OTM) conversion rights into STRAT. The USD debt raised through bonding is used to purchase ETH immediately, increasing the ETH backing per STRAT. Because the conversion rights on STRAT are OTM, fewer STRAT tokens are minted relative to the treasury's ETH growth, driving EPS higher through accretive dilution.