Simplified Workflow
Liquidity Provider Workflow
Allegory: The Farmer’s Orchard
Imagine you’re a farmer with some apple seeds (your USDC). You decide to plant these seeds in a community orchard (the FT/XT AMM pool), where farmers come together to grow apple trees and share the harvest.
Step 1: Initial Deposit You plant your apple seeds in the orchard, providing valuable resources for everyone to grow apples together.
Step 2: Receive Orchard Tokens As a reward for your contribution, the orchard gives you "orchard tokens" (LP-FT and LP-XT), representing your share of the trees in the orchard.
Step 3: Redemption Options When you’re ready to enjoy the fruits of your labor, you have two choices for harvesting:
Option 3.a: Redeem Orchard Tokens for Apple Seeds - You can trade your orchard tokens back to get your original apple seeds.
Option 3.b: Redeem for Apples and Extra Saplings - You can exchange your orchard tokens for a basket of apples (FT tokens for fixed returns) and new apple saplings (XT tokens for potential growth).
Farmer/Lender Workflow
Allegory: The Beekeeper’s Honey Investment
Imagine you’re a beekeeper with some honey jars (your USDC) and want to invest in a special bee farm to earn more honey in return.
Step 1: Initial Deposit You take some jars of honey to the bee farm (Smart Contract) and invest them to start the honey-making process.
Step 2: Token Operations At the farm, your honey jars go through two quick steps:
The farm splits your honey into two parts (FT and XT).
Then, it sells off the less sweet part (XT) and hands you back jars of “prime honey” (FT tokens).
These “prime honey” jars represent your investment and can grow in value over time.
Step 3: Redemption Options Now, you have two ways to enjoy your honey profits:
Option 3.a: Hold Until Maturity - If you’re patient, you can keep your prime honey jars until the season’s end. At maturity, you’ll get back your honey jars plus a little extra—like receiving 100 honey jars instead of your initial 90.
Option 3.b: Early Exit - If you’d like to enjoy some returns sooner, you can sell your prime honey jars early. You’ll get a smaller but immediate return—around 98 honey jars, for example.
Borrower Workflow
Allegory: The Pawnshop Loan
Imagine you’re a rare collector with a valuable item—a vintage watch (PT-sUSDe). You need some quick cash but plan to buy back your watch later, so you head to a reliable pawnshop (the Smart Contract).
Step 1: Collateral Deposit You hand over your watch as collateral, worth $50 in value, to the pawnshop. This starts the process of getting a loan based on your watch’s value.
Step 2: Token Generation and Conversion The pawnshop performs some quick steps:
Loan Assessment - They assess your watch and issue you a loan (FT tokens) worth 90% of its value. This means they offer you $45 (FT tokens) for it, and they log the deal with a "loan receipt" (GT NFT).
Transaction Process - The pawnshop has their own way of splitting and exchanging values (XT and FT) to ensure they can lend you cash while keeping your watch safely recorded as collateral.
Final Cash - After all conversions, you walk away with around $40.49 cash, having paid a small fee for the service.
Step 3: Fee Calculation and Distribution The pawnshop calculates the interest you owe and a small service fee (borrowing fee) on top of the cash you’ve received. This ensures they make a bit of profit for their services.
Step 4: Loan Repayment When you’re ready to repay, you return to the pawnshop with $45. You repay your loan, get your watch back, and they mark the transaction as complete by destroying the loan receipt (burning the GT NFT).
Degens Workflow
Allegory: The Antique Dealer’s Auction Flip
Imagine you’re an antique dealer with $12 in cash. You’ve found an auction house (Smart Contract) that lets you “leverage” your initial money to buy an even more valuable antique—a rare coin collection (PT-sUSDe). You plan to use this leverage to buy the collection now and sell it later for a profit.
Step 1: Initial Deposit You bring $12 to the auction house and hand it over. They give you a mix of “auction tokens” (XT and FT) that lets you participate in the bidding. You now have both tokens, with FT worth a bit more.
Step 2: Token Swaps and Leverage The auction house then works some magic, converting and combining your tokens. After some smart swaps and trades, they effectively turn your $12 into $67 worth of bidding power—a major boost thanks to leverage!
Step 3: Fee Processing For arranging these token swaps and giving you this extra buying power, the auction house charges you a small fee, which they deduct from your bidding tokens.
Step 4: Collateral Purchase With your remaining auction tokens, you finally “purchase” the rare coin collection, worth $64.04. The auction house records this as collateral.
Step 5: GT NFT Generation To track your leveraged position, the auction house gives you a digital certificate (GT NFT) showing the value of your rare coins and your debt obligation ($57.64). This certificate is now proof of both your assets and your debt.
Step 6: Loan Repayment Later, when you’re ready to cash out, you repay the loan (57.64 USDC debt) and get back the full value of the coin collection. After closing out, you even get a small remaining profit, and the certificate (GT NFT) is canceled.
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