Traditional Finance to Decentralized Finance Interpolation | TDI
Last updated
Last updated
TDI - Traditional Finance to Decentralized Finance Interpolation tracks isolated financial sectors that have direct crypto holdings and weights those holdings influence on the total decentralized finance market cap. This is a niche product that can be used to bolster a portfolio view which sees prominent financial institutions playing a pivotal role in cryptocurrency adoption and expansion. This capital allocation is weighted against fluctuations across multiple prominent large cap tokens.
If the influence of traditional finance sectors grows - this asset is structured to appreciate in value. However, volatility is baked into the product, therefore it can have wider fluctuations based on said influence as well as typical market swings. As such, it can act as a shorter to mid-term trading tool based on portfolio bias of the aforementioned.
Mints start at 10 USD worth of ISA and will theoretically trade as a summation of new project growth, total market capitalization, and overlap in indirect exposure that leads to crypto market developments. The higher the growth in the area, the more sensitive TDI is to positive moves. The lower the growth, the less sensitive the asset trades. Over time - the range will rise or fall based on growth, but the bias representation will remain consistent.
Like all collateralized products on our platform, sRho is used to secure the short position. TDI utilizes a 1.75:1 collateral ratio to secure the position. A 2.5% mint fee is required to mint TDI - with the minter receiving sTDI in return as a receipt.
A 2.5% fee applies to swapping sTDI. sTDI can be bonded and sold to the Treasury. Short-sellers will also pay interest to the pooled long sTDI at a daily interest rate of 0.2% per day - which will be paid for in sRHO. This daily interest will be calculated at the time of establishing the short by entering the maximum number of days you will be short for. Once the time limit is up - the short contract will expire and the short closed. If TDI is below the price when the short was initiated, the aggregated long pool of TDI will pay the unit count worth of profit to the now closed short holder. The time interest the short paid to the collected pool of longs will then be distributed to the longs proportional to their positional unit count.
However, the interest will only be paid to the long holders that were in the pool at the time the short was established. If a short-seller chooses to close out their position at a loss, the collateral lost will be divided among all long sTDI unit holders that were in the pool at the time the short was established. If the short-seller closes out their position at a profit, the percentage of the profit will be divided amongst all long-holders and the appropriate sTDI units will be transferred to the short-seller as profit.
Shorting above the total float of TDI in the lending pool is prohibited.
