📖Overview
Last updated
Last updated
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 (tToken) 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 tTokens and allows users to engage in collateralized borrowing by using their tTokens as collateral. By leveraging the power of decentralized technology, Term Structure aims to create a more efficient and accessible fixed interest rate market ecosystem.
zkTrue-up makes users' actions gas-free and some transaction information private. Learn more about how zkTrue-up works here.
The Term Structure team focuses on building a comprehensive infrastructure and product suite for fixed interest rate markets. This includes the development of Fixed-Rate Borrowing/Lending, tToken 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 tTokens. Overall, Term Structure is committed to creating a more robust and better functional fixed interest rate market ecosystem within the crypto space.
In the Fixed-Rate Borrowing/Lending, 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 Fixed-Rate Borrowing/Lending, lenders can mint tTokens (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 repurchase markets, also known as "repo markets," users can use their tTokens 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 tToken holders to easily enhance capital efficiency and take advantage of yield curve carry opportunities within the market.
In the tToken Markets, buyers and sellers can trade tTokens minted after successful auctions in the Fixed-Rate Borrowing/Lending. These trades take place on orderbooks on Term Structure, and the matching engine on 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 tToken markets trading. Primary Dealers on the protocol will play a key role in facilitating trades in the tToken markets as market makers. This design allows users to buy and sell their tTokens quickly and provides greater flexibility and liquidity within the fixed interest rate market ecosystem.
