Let’s sort out the numbers for a friend—record a loan transaction: 640 USDC goes in, 800 USDC goes out. The difference between these two figures is the whole point of the problem. Where exactly does the 160 come from? I’m going to replay it step by step.
Good grief—it isn’t hidden in the interest. It’s hidden in a single swap/rebalance. The entire accounting is completed in four steps, and you can’t skip even one step. Your friend only sees two numbers; I’m watching the three steps between those two numbers.
Replaying this transaction step by step: deposit 640, then issue 640 FT and also issue 640 XT. The smart contract automatically swaps the XT into 160 FT. Label the balance after every step; you’re not allowed to skip any step. If you jump ahead, the origin of that 160 gets blurred. This account must be laid out so it can be reconciled—every cell in the table speaks for itself.
First, the conclusion: the 160 is not interest that slowly accumulates—it’s produced by the one swap where 640 XT is exchanged for 160 FT. The profit is realized at the moment of the swap. After that, each day is just waiting for maturity. The profit is created by the swap, not by “waiting it out.” These two statements differ by an entire chain of accounting.
Put these four steps into a table: 640 FT plus 640 XT, then swap out XT to get 160 FT. Hold 800 FT, redeem 800 at maturity, annualized return 25%. The borrowing/loan interest earned by @TermMax is obtained at the swap step. The remaining steps are just process; the process itself generates no profit.
Once I label that step where 640 XT is swapped for 160 FT, I pause for a few seconds, then continue recording. I replayed the official example accounting, and every step’s balances in the wallet match exactly. There isn’t a single moment where extra value appears out of thin air. When this account is balanced, the source of the 160 is written clearly—clearer than any profit screenshot. The ledger is the only judge.
Why doesn’t the profit “accumulate over time”? Because when XT matures it goes to zero—if you just leave the XT sitting there without swapping, that XT is worth nothing, not a cent. The profit is created by the swap action. But the key is: the FT price at the moment of the swap determines how much you earn. Swap a bit earlier or a bit later, and it becomes a different account. It’s the timing that sets the price. The swap step is the whole answer.
Back to the 160 at the beginning—it’s hidden in the step where 640 XT is swapped for 160 FT. One swap, profit realized. After reproducing this accounting, when you see the FT yield again, ask one question first: which step is it created in? #TermMax
Good grief—it isn’t hidden in the interest. It’s hidden in a single swap/rebalance. The entire accounting is completed in four steps, and you can’t skip even one step. Your friend only sees two numbers; I’m watching the three steps between those two numbers.
Replaying this transaction step by step: deposit 640, then issue 640 FT and also issue 640 XT. The smart contract automatically swaps the XT into 160 FT. Label the balance after every step; you’re not allowed to skip any step. If you jump ahead, the origin of that 160 gets blurred. This account must be laid out so it can be reconciled—every cell in the table speaks for itself.
First, the conclusion: the 160 is not interest that slowly accumulates—it’s produced by the one swap where 640 XT is exchanged for 160 FT. The profit is realized at the moment of the swap. After that, each day is just waiting for maturity. The profit is created by the swap, not by “waiting it out.” These two statements differ by an entire chain of accounting.
Put these four steps into a table: 640 FT plus 640 XT, then swap out XT to get 160 FT. Hold 800 FT, redeem 800 at maturity, annualized return 25%. The borrowing/loan interest earned by @TermMax is obtained at the swap step. The remaining steps are just process; the process itself generates no profit.
Once I label that step where 640 XT is swapped for 160 FT, I pause for a few seconds, then continue recording. I replayed the official example accounting, and every step’s balances in the wallet match exactly. There isn’t a single moment where extra value appears out of thin air. When this account is balanced, the source of the 160 is written clearly—clearer than any profit screenshot. The ledger is the only judge.
Why doesn’t the profit “accumulate over time”? Because when XT matures it goes to zero—if you just leave the XT sitting there without swapping, that XT is worth nothing, not a cent. The profit is created by the swap action. But the key is: the FT price at the moment of the swap determines how much you earn. Swap a bit earlier or a bit later, and it becomes a different account. It’s the timing that sets the price. The swap step is the whole answer.
Back to the 160 at the beginning—it’s hidden in the step where 640 XT is swapped for 160 FT. One swap, profit realized. After reproducing this accounting, when you see the FT yield again, ask one question first: which step is it created in? #TermMax