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Making DeFi complete
Term Structure is a decentralized fixed-income protocol powered by zkTrue-up, a platform that enables peer-to-peer lending and borrowing with fixed interest rates. Term Structure Bond tokens (tsbToken) will be created for lenders after borrowers' and lenders' orders are matched. This protocol also provides users with a secure and transparent marketplace for buying and selling tsbTokens and allows users to engage in collateralized borrowing by using their tsbTokens as collateral. By leveraging the power of decentralized technology, Term Structure aims to create a more efficient and accessible fixed interest rate market ecosystem.
The Term Structure team focuses on building a comprehensive infrastructure and product suite for fixed interest rate markets. This includes the development of Primary Markets, Secondary Markets, and Repurchase Markets for the most liquid base tokens (e.g. ETH, WBTC, USDT, USDC, and DAI) in the crypto space. In the future, the team plans to extend this infrastructure to include derivative products based on tsbTokens. Overall, Term Structure is committed to creating a more robust and better functional fixed interest rate market ecosystem within the crypto space.
In the primary markets, zkTrue-up's auction engine is used to match borrowers and lenders. Interest rates for fixed-rate borrowing and lending are determined by batch auctions according to orders submitted by borrowers and lenders. All orders are kept private, and users maintain control over their assets (non-custodial) at all times, thanks to zkTrue-up. This ensures a secure and transparent marketplace for borrowing and lending.
When orders are matched in the primary markets, lenders can mint tsbTokens (ERC-20) which grants the holders the right to receive a fixed interest payment and original purchase proceeds on a specific maturity date. Borrowers will receive borrowed underlying tokens as a loan and the loan information (collateral type and amount, debt type and amount, and maturity date) will be recorded on a smart contract. This arrangement allows both parties to track and manage their respective positions easily.
In the secondary markets, buyers and sellers can trade tsbTokens minted after successful auctions in the primary markets. These trades take place on orderbooks on Term Structure, and the matching engine on zkTrue-up handles the matching of orders. Term Structure will collaborate with Primary Dealers (there are still opportunities available!) who are similar to designated market makers on a centralized exchange (CEX) to ensure that there is always ample liquidity available for secondary market trading. Primary Dealers on the protocol will play a key role in facilitating trades in the secondary markets as market makers. This design allows users to buy and sell their tsbTokens quickly and provides greater flexibility and liquidity within the fixed interest rate market ecosystem.
In the repurchase markets, also known as "repo markets," users can use their tsbTokens as collateral to borrow underlying tokens for funding or leverage. The matching engine for the repo markets is on zkTrue-up, and it will handle the process for matching orders on the orderbook. Repo markets will only offer short-term borrowing for funding and leverage purposes. This allows tsbToken holders to easily enhance capital efficiency and take advantage of yield curve carry opportunities within the market.