For a while I filed "generate yield" under the same heading as the other two.
I started noticing it in Grvt's Unified Margin list. Three things the same deposit can do at once — serve as collateral, generate yield, keep spot exposure. Same list, same tense, same "simultaneously."
Maybe that's not the same kind of claim.
Collateral and spot exposure are just states of a balance. They don't depend on anything happening elsewhere. Yield does — it's a pointer to a separate mechanism, and that mechanism has numbers attached, a few paragraphs down.
80% of the loan comes from Grvt. Only 20% is the trader's own.
So the deposit that's "earning" isn't earning in isolation. It's funding someone else's position, at four times their own stake.
There's a name for that 20%. First-loss tranche. Whatever goes wrong hits that slice before it gets anywhere near a depositor.
That looks like protection. And it is, right up until it isn't.
There's a threshold on the trader's maintenance margin, and Grvt's liquidation engine is watching it, not the trader. Cross it, and the engine closes the position on its own.
Collateral and spot exposure don't carry that clause. They just hold, for as long as the balance exists.
Yield holds too — until someone else's margin doesn't.
@grvt_io #grvt
I started noticing it in Grvt's Unified Margin list. Three things the same deposit can do at once — serve as collateral, generate yield, keep spot exposure. Same list, same tense, same "simultaneously."
Maybe that's not the same kind of claim.
Collateral and spot exposure are just states of a balance. They don't depend on anything happening elsewhere. Yield does — it's a pointer to a separate mechanism, and that mechanism has numbers attached, a few paragraphs down.
80% of the loan comes from Grvt. Only 20% is the trader's own.
So the deposit that's "earning" isn't earning in isolation. It's funding someone else's position, at four times their own stake.
There's a name for that 20%. First-loss tranche. Whatever goes wrong hits that slice before it gets anywhere near a depositor.
That looks like protection. And it is, right up until it isn't.
There's a threshold on the trader's maintenance margin, and Grvt's liquidation engine is watching it, not the trader. Cross it, and the engine closes the position on its own.
Collateral and spot exposure don't carry that clause. They just hold, for as long as the balance exists.
Yield holds too — until someone else's margin doesn't.
@grvt_io #grvt