🤔 If you are a developer/product manager, Treehouse provides you with a set of reusable fixed income Legos. A typical assembly route is:
1. Select Reference: Pull DOR’s term points (e.g., 1M/3M/6M/1Y) as the reference for coupon or swap;
2. Choose Base: Use tAssets (like tETH) to carry cash flows and collateral;
3. Define Contracts: Clearly state reset frequency, upper/lower limits (applicable for range accumulation), callable terms, margin/clearing logic;
4. Linked Settlement: Write interest rate observation, coupon accumulation, and maturity payment into on-chain task flows.
What can we do?
Range Accrual: Accumulate higher coupons when DOR is within a certain range, and downgrade when exceeding;
Callable Notes: The issuer redeems at a specified premium on a particular date;
Term Loans: Interest calculated based on DOR + spread, supporting margin and additional terms;
Swaptions: Adding a layer of options around the fixed-floating swaps of DOR. Official materials provide modular diagrams for these directions on the product page.
What should we pay attention to?
Benchmark Consistency: All interest, penalty interest, and settlement point to the same line of DOR to avoid inconsistent standards;
Maturity and Liquidity: The secondary liquidity of tAssets and redemption rules need to be clearly stated (who will do the secondary market, how to conduct buybacks/making market);
Transparency and Backtesting: Visualize backtesting of historical DOR curves against product performance to reduce the 'black box' feeling. These practices can significantly enhance the willingness of institutions to adopt.
Still the same saying! First have the scale, then talk about the structure; first have the base, then talk about the gameplay. What DOR + tAssets give you is not a 'higher annual yield', but a set of fixed income product lines that can be replicated and scaled.
@Treehouse Official $TREE #Treehouse