Native Tokens
The protocol offers four native tokens to manage pool economics. Each of the native tokens offers a unique utility and are minted according to the type of user interaction.
Each Timeswap pool offers five ERC20 & one ERC721 native token: Bond principal token, Bond interest token, Insurance principal token, Insurance Interest token and liquidity tokens along with an ERC721 collateralized debt token.
Each of the ERC20 token contracts has an underlying ERC20 token with a fixed maturity date. An ERC721 Collateralized Debt Token contract has an underlying debt in terms of an ERC20 token, underlying collateral in terms of the paired ERC20 token, and a fixed maturity date.
Native Tokens
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Bond Principal tokens represent the exact claim on the assets in the Asset pool after maturity, including assets repaid by the borrowers.
The recipients of the Bond Principal tokens are the lenders who lent the underlying ERC20 asset tokens into the Principal pool. Bond Principal tokens essentially accounts for the exact Principal owed after maturity to the lenders which is equal to the asset lent. An owner of the Bond tokens can burn them after the maturity date, to withdraw the exact same amount of the underlying asset tokens in the Principal pool.
For example, consider a user who owns 30 Bond Prinicipal tokens of a DAI/WETH pool expiring on 12-30-2022. Assuming a total supply of 500 Bond Principal tokens held by all the lenders and a total of 1200 DAI assets in the Principal pool, the user, then, can swap his tokens for 30 DAI after 12-30-2021.
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Bond Interest Token:
Bond Interest tokens represent the exact claim on the remaining assets in the Asset pool after the Bond Principal Token settlement is done after maturity
The recipients of the Bond Interest tokens are the lenders who lent the underlying ERC20 asset tokens into the Principal pool. Bond Interest tokens essentially accounts for the exact Interest owed after maturity to the lenders. An owner of the Bond Interest tokens can burn them after the maturity date, to withdraw the exact same amount of the underlying asset tokens in the Principal pool provided there are enough assets to pay for all the lenders claim, if not than the claim is done proportionally based on total Bond Interest token holding of all lenders .
For example, consider a user who owns 30 Bond Principal tokens of a DAI/WETH pool expiring on 12-30-2022. Assuming a total supply of 500 Bond Principal tokens held by all the lenders and a total of 1200 DAI assets in the Principal pool, the user, then, can swap his tokens for 30 DAI after 12-30-2021.
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Insurance Principal token holder gets the claim to the collateral defaulted by the borrower after maturity equal to the percentage of unrealized assets from Bond tokens on the insurance coverage held by the lender.If there is no default on Bond Principal Token than insurance principal token doesnt activate
The recipients are the lenders who lent into the pool and chose to get the insurance coverage on the default from borrowers. Insurance Principal tokens help to protect the lenders only when Bond Principal tokens are not able to withdraw the same amount of assets from the principal pool. This can happen when assets in the principal pool are less than the total Bond Principal tokens held by all lenders. An owner of the Insurance Principal token can burn it after the maturity date to withdraw up to the same percentage of the amount of insurance tokens.
For example, suppose the same user owns 1 Insurance Principal token of a pool expiring on 12-30-2022. Supposedly the user was not able to realize 20% of his bond principal token claim, this means the lender can now claim up to 0.2 WETH collateral from the collateral pool.
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Insurance Interest Token:
Insurance Interest token holder gets the claim to the collateral defaulted by the borrower after maturity equal to the percentage of unrealized assets from Bond Interest tokensIf there is no default on Bond Interest Token than insurance principal token doesnt activate
The recipients are the lenders who lent into the pool and chose to get the insurance coverage on the default from borrowers. Insurance Interest tokens help to protect the lenders only when Bond Interest tokens are not able to withdraw the same amount of assets from the principal pool. This can happen when assets in the principal pool are less than the total Bond Principal tokens held by all lenders. An owner of the Insurance Principal token can burn it after the maturity date to withdraw up to the same percentage of the amount of insurance tokens.
For example, suppose the same user owns 0.5 Insurance Interest token of a pool expiring on 12-30-2022. Supposedly the user was not able to realize 20% of his bond interest token claim, this means the lender can now claim up to 0.1 WETH collateral from the collateral pool.
Collateralized debt tokens:
Collateralized debt tokens contains the information about Debt to be paid and collateral locked by a borrower
The recipients are the borrowers. An owner of the collateralized debt tokens can burn them to withdraw the proportional collateral locked when the underlying proportional debt is paid before the maturity date
For example, there is a user who owns a Collateralized Debt token of a pool expiring on 12-30-2021 with 2 WETH locked as collateral against a debt of 300 DAI. If the user repays 300 DAI debt before 12-30-2021, the user can burn his/her collateralized debt tokens to withdraw the 2 WETH locked as collateral. If the user did not pay the 300 DAI debt, the collateralized debt tokens will lose the repay debt functionality, thus, the user will never be able to withdraw the staked collateral.
Liquidity tokens:
Liquidity tokens gives the token holders the claim to existing liquidity i.e. assets in the Principal pool and collateral locked in the Collateral Pool after the claims of lenders are realized
The recipients are the liquidity providers who add liquidity into the pool. After maturity, they can burn their liquidity tokens to withdraw their liquidity from the pool
Last modified 1yr ago