Market Interpretation
Inspired by Uniswap, Timeswap uses a unique 3 variable constant product equation:
Where
= Principal Pool, Y = Interest rate Pool,
= Collateral factor Pool
The market interpretation for variables
is as follows:
= Principal Pool, where lenders & liquidity providers deposit their assets
= Interest Rate Pool such that ratio
is equal to the maximum interest rate per second of a pool for a particular token pair at the time of the transaction for the remaining duration of the pool
= Collateral factor Pool such that ratio
is equal to the minimum CDP of a pool for a particular token pair at the time of the transaction for the remaining duration of the pool

Let's deep dive into how to use market interpretation with an example:
Alice wants to initialize a DAI-ETH pool with a maturity time of 6 months. She wants to lock 10,000 DAI and expects an annual return of 15% and a CDP of 167% for the given pair and duration.
DAI
(annual interest rate expectation of 15% & number of seconds in a year = 31556926s)
This means
(CDP of 167%), such that the value of
is ETH equivalent in DAI
Assuming the price of ETH at the time of pool creation by Alice was 4000DAI, this means the value of
= 4.175 ETH
So Alice can do pool initialization for the DAI-ETH pool with a duration of 6 months, such that variables
Last modified 11mo ago