Worked Example
ASSUMPTIONS (launch terms)
margin ratio 7.5% (13.33x promise leverage)
promise APY 1.25% on the active promise
funding bonus 0.75% on funded capital, during the cooldown
underlying APY 3.5%
auction 30-min steps, each offering a further 0.84% of the unoffered margin
bidder hurdle 10% (illustrative)1. Alice stakes $75,000
At the 7.5% margin ratio her margin backs a $1,000,000 promise: $75,000 ÷ 7.5%.
She keeps custody of the unfunded $1,000,000; the facility holds only her margin.
2. Yield earned
Underlying APY: 3.5% on $75,000 = $2,625 / year
Promise APY: 1.25% on the $1,000,000 promise = $12,500 / year, 16.7% on margin
Total: ≈ 20.2% APY on posted margin
3. 3Jane calls 20% of the pool
A new fintech facility executes, and 3Jane opens a capital call for 20% of active promises.
Alice's obligation: $200,000, fundable over the 9-day funding window.
4a. She funds the call
She delivers $200,000 USDC and receives $200,000 of USD3 in a 35-day cooldown, earning USD3 yield plus the funding bonus.
$15,000 of margin releases back to her; her promise pays down to $800,000.
Her remaining $60,000 of margin still earns ≈ 20.2% APY: 3.5% base yield plus 1.25% on the $800,000 remaining promise, still 13.33x her margin.
The $200,000 funded earns USD3 yield plus the 0.75% funding bonus while the cooldown runs, ≈ 8.75% at the ~8% USD3 target.
Day 35: the cooldown ends, the full amount unlocks, and the USD3 is redeemable to USDC through USD3 liquidity.
4b. She misses a call
Suppose in a later epoch Alice has a $50,000 obligation and fails to fund it.
Slash. Her full $75,000 margin moves into the auction pool. The shortfall is $50,000.
Auction. The offer ramps every 30 minutes, each step adding a further 0.84% of the not-yet-offered pool. A bidder holding out for a 10% return on the $50,000 fill needs a $5,000 award; the offer crosses that at step 9, about 4.5 hours in. The bidder fills the $50,000 for the $5,483 award, an 11% instant return, and the auction clears.
Return. The fill covered the whole shortfall, so everything except the award returns: Alice gets $69,517 back as margin, with a ≈ $927,000 promise restored.
Net cost of the miss: $5,483, the clearing award, about 7.3% of her margin and 11% of the missed amount, not the whole bond.
Her position continues at $69,517 of margin backing a ≈ $927,000 promise, earning the same ≈ 20.2% APY on the smaller base.
A $500,000 miss against the same pool would ramp much deeper, clearing about 2.7 days in and awarding $50,158 of her margin; see Backstop Bidders.
5. She unstakes
She requests an unstake, waits the 2-epoch unstake delay, and exits through the 20% per-epoch unstake capacity.
Until her position exits she remains callable, and any call in that window must be funded.
On exit she claims her remaining margin.
Outcomes
Alice (funds her calls)
~20.2% APY on margin, plus USD3 yield and the funding bonus on the $200,000 funded
Alice (misses a $50k call)
Loses $5,483 of margin; the rest returns after the auction
3Jane
$200,000 of promised capital delivered exactly when the facility executed
Backstop bidder
$50,000 of USD3 in cooldown plus $5,483 of margin for backstopping the miss
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