tASSET Architecture
-Properties
An tASSET can be described by the following properties:
-Name & Symbol
Describes the underlying asset the tASSET is supposed to track.
-Minimum Collateral Ratio
A CDP that mints the tASSET cannot have a collateral ratio below this value, lest it be subject to liquidation through auction.
-Auction Discount Rate
For a CDP subject to liquidation, describes the discount for which its collateral can be purchased.
-Price
The current registered price as reported by its Oracle Feeder. This is mainly used for determining collateral ratio for CDP and does not affect the tASSET's trading price on ExoniumDEX AMM directly.
Prices are only considered valid for 60 seconds. If no new prices are published after the data has expired, ExoniumDEX will disable CDP operations like mint, burn, deposit and withdraw until the price feed resumes.
For instance, the price feed is halted when real-world markets for the asset are closed. The market hour used to track the price of tASSETs is based on stock market trading hours. This does not affect the ability to trade on the asset's ExoniumDEX AMM pool.
-Oracle Feeder
The Oracle Feeder can change the registered on-chain price for an tASSET. They are responsible for reporting an accurate and up-to-date price, so that the tASSET's trading value is kept in sync with its reflected asset. Each tASSET has its own dedicated feeder, which can be reassigned through governance. tEXO community can assign oracle feeders to other providers to newly whitelisted assets through governance.
tASSET Listing Process
-Whitelisting
To whitelist an tASSET is to register it with ExoniumDEX, which involves several operations, including:
creating the tASSET token and assigning its oracle feeder
creating the tASSET-tDOLLAR trading pair on ExoniumDEX AMM and its LP token
registering the new tASSET with all relevant ExoniumDEX Contracts
Whitelisting is approved by governance and is automatically implemented if the whitelisting poll receives enough votes. Once an tASSET has been whitelisted, it will be mintable through opening a CDP and tradeable on ExoniumDEX AMM. In addition, LP tokens for the corresponding ExoniumDEX AMM pool will begin to earn ExoniumDEX inflation rewards when staked.
-Delisting & Migration
In situations where the tracked asset undergoes a corporate event such as a stock split, merger, bankruptcy, etc. and becomes difficult to reflect properly due to inconsistencies, an tASSET can be delisted, or discontinued, with the following migration procedure initiated by the oracle feeder:
New replacement tASSET token, ExoniumDEX AMM pair, and LP tokens contracts are created, and the present values of properties of tASSET will be transferred over
The oracle feeder sets the "end price" for the tASSET to the latest valid price
The tASSET's min. collateral ratio is set to 100%
At this stage:
CDPs may no longer mint new tokens of the tASSET
Liquidation auctions are disabled for the tASSET
Burns will take effect at the fixed "end price" for withdrawing collateral deposits
LP tokens for the tASSET will stop counting for staking rewards
Deprecation will not directly affect the functionality of the tASSET's ExoniumDEX AMM pool and users will still be able to make trades against it, although price is likely to be very unstable. Users are urged to burn the tASSET to recover their collateral if they have an open position, and are free to open a new CDP / engage in liquidity provision for the new, replacement tASSET. The old tASSET will be retired and marked as "deprecated" on front-end interfaces.
-Collateralized Debt Position
New tokens for a listed tASSET can be minted by creating a collateralized debt position (CDP) with either tDOLLAR or other tASSET tokens as collateral. The CDP is essentially a short position against the price movement of the reflected asset, -- i.e. if the stock price of AAPL rises, minters of tAAPL would be pressured to deposit more collateral to maintain the same collateral ratio.
-Collateral Ratio
The collateral ratio (C-ratio) is simply the ratio of the value of a CDP's locked collateral to the value of its current minted tokens.
The CDP is required to always maintain a C-ratio above the tASSET's minimum, otherwise the protocol will initiate a margin call to liquidate collateral in an attempt to restore the position's C-ratio. The protocol is able to determine whether a position is underneath the required threshold by re-denominating all tASSET values into tDOLLAR via their oracle-reported prices.
-Opening a new position
Users are allowed to set the initial C-ratio for their CDPs as long as it meets or exceeds the mandated minimum value for each tASSET.
-Depositing / withdrawing collateral to position
With an existing CDP, the user can deposit additional collateral Qc′Qc′ to raise its effective C-ratio.
-Minting / Burning tASSETs
In addition to depositing and withdrawing collateral, the user can also mint and burn tASSETs against the CDP to adjust the value of their CDP's effective C-ratio.
-Closing a position
If a user wishes to collect all their collateral from their CDP, they must close their position by returning the outstanding balance of minted tASSETs, which the protocol will burn. The user will then be able to withdraw their locked collateral.
-Protocol Fee
The ExoniumDEX protocol fee is charged whenever a withdrawal from a CDP is made (including closing the position). This fee is then converted into tEXO through ExoniumDEX AMM and distributed to tEXO token stakers as a staking reward.
-Margin Call & Auction
Maintaining a lower C-ratio allows you to mint more tASSET tokens for less collateral, but obviously does not come without its risks. A CDP can be margin called when it falls below the min. collateral ratio. At this stage, if the owner does not quickly act and deposit more collateral or burn tASSETs to deleverage their position, other users may purchase their CDP's collateral at an auction discount.
The protocol will try to raise the CDP's C-ratio by burning tASSETs it recovers from liquidating its collateral. The remainder of the collateral not sold is returned to the CDP's owner.
The auction process continues until either the CDP's C-ratio is restored to a level above the tASSET's minimum collateral ratio OR the quantity of minted tASSETs is completely burned, which closes the position. Because this provides almost risk-free profit, participants are incentivized to liquidate the entire margin-called position when possible to maximize their profits.
To avoid liquidation, users should aim for a C-ratio that factors in the known price dynamics of the reflected asset. A safety buffer of at least 50% above the tASSET's minimum is usually recommended. Users with open positions should actively monitor price activity that threaten the safety of their CDP and respond accordingly either by burning tASSETs (or closing the position altogether), or deposit more collateral to reduce the possibility of liquidation.
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