I was reading the section on lending range order setters and one detail caught my attention: in the example, Bob lends 10,000 USDC, and after just one match, he's already holding 10,250 FTs. My first assumption was that the extra 250 were projected yield, not something real yet.
After checking the mechanics again, that's not it. At placement, the system mints principal FTs equal to Bob's full amount, paired with XTs, allocated to the order. What changes at matching is only the interest portion: the borrower splits their issued FTs into principal and interest, sells the interest FTs to Bob's order for XTs, then redeems using those XTs plus their own principal FTs. Bob never touches XT, he just receives the interest FTs.
What surprised me was that the borrower does all the splitting and redemption, not the lender. Bob stays passive once he sets his pricing curve, trading control over individual fill pricing for fixed, predictable yield.
Still curious how the curve decides which fills land near 4% versus 6%.
#termmax @TermMax
After checking the mechanics again, that's not it. At placement, the system mints principal FTs equal to Bob's full amount, paired with XTs, allocated to the order. What changes at matching is only the interest portion: the borrower splits their issued FTs into principal and interest, sells the interest FTs to Bob's order for XTs, then redeems using those XTs plus their own principal FTs. Bob never touches XT, he just receives the interest FTs.
What surprised me was that the borrower does all the splitting and redemption, not the lender. Bob stays passive once he sets his pricing curve, trading control over individual fill pricing for fixed, predictable yield.
Still curious how the curve decides which fills land near 4% versus 6%.
#termmax @TermMax