Tokenomics & TP Value
Understanding TP tokens, pool mechanics, and the value accrual system in Libre's lending pools.
Overview
Libre's lending system uses TP (Tether Pool) tokens to represent lender positions in USDT pools. These tokens automatically accrue value as borrowers pay interest, providing a simple and transparent way to track earnings.
TP Token Mechanics
How TP Tokens Work
When you deposit USDT into a lending pool:
Initial deposit: Receive TP tokens at 1:1 ratio with your USDT
Interest accrual: TP tokens increase in value as borrowers pay interest
Redemption: Exchange TP tokens back for USDT + earned interest
Transferability: TP tokens can be sent to other Libre accounts
Example: 90-Day Pool Investment
Day 1 - Initial Deposit:
Deposit: 10,000 USDT
Receive: 10,000 TP tokens
TP token value: 1.000 USDT each
Day 45 - Mid-Term:
Accrued interest: ~$137 (11% APR × 45 days)
TP token value: 1.0137 USDT each
Your position: 10,000 TP × 1.0137 = $10,137
Day 90 - Pool Maturity:
Total interest: ~$275 (11% APR × 90 days)
TP token value: 1.0275 USDT each
Final redemption: 10,000 TP × 1.0275 = $10,275
Pool Economics
Interest Distribution
Fixed APR: Each pool has a predetermined annual rate
Pro-rata sharing: Interest divided proportionally among all lenders
Continuous accrual: TP token value updates in real-time
No lock-up: Exit anytime subject to pool liquidity
Pool Utilization Impact
Unlike variable-rate systems, Libre pools offer guaranteed returns:
Full APR earned: Regardless of utilization percentage
Predictable income: No surprises from low borrower demand
Rate certainty: Fixed rates set at pool creation
TP Token Value Formula
Current TP Value = (Pool USDT + Accrued Interest) / Total TP Supply
Where:
- Pool USDT = Total lender deposits
- Accrued Interest = Cumulative borrower interest payments
- Total TP Supply = All TP tokens in circulation for that pool
Practical Example
Pool State:
Total USDT deposited: $1,000,000
Accrued interest: $50,000
Total TP tokens: 1,000,000
Current TP value: ($1,000,000 + $50,000) ÷ 1,000,000 = $1.05 per TP
Multiple Pool Strategy
Diversification Benefits
Lenders can spread funds across multiple pools:
Pool A
30 days
3%
20%
Conservative, liquid
Pool B
30 days
9%
30%
Moderate risk/return
Pool C
90 days
11%
30%
Medium-term growth
Pool D
180 days
13%
20%
Long-term maximization
Risk Management
Spread duration risk: Mix short and long-term pools
Liquidity management: Keep some funds in shorter-term pools
Rate optimization: Balance conservative and aggressive rates
TP Token Trading
Secondary Market
TP tokens are fully transferable, enabling:
Early exit: Sell tokens instead of waiting for redemption
Premium/discount trading: Market-driven pricing
Speculation: Trade on interest rate expectations
Liquidity provision: Help other users access pools
Trading Considerations
Market price: May trade above/below redemption value
Time decay: Value approaches redemption price over time
Pool performance: Actual vs. expected interest affects pricing
Yield Calculations
Simple vs. Compound Returns
Libre pools use simple interest calculation:
Annual interest: APR × principal amount
Time-adjusted: Prorated for actual days held
No compounding: Interest doesn't earn additional interest
Transparent calculation: Easy to verify returns
Effective Yield Examples
30-Day Pool at 9% APR:
Monthly return: 9% ÷ 12 = 0.75%
On $10,000: Earn $75 per month
90-Day Pool at 11% APR:
Quarterly return: 11% ÷ 4 = 2.75%
On $10,000: Earn $275 per quarter
180-Day Pool at 13% APR:
Semi-annual return: 13% ÷ 2 = 6.5%
On $10,000: Earn $650 per half-year
Pool Lifecycle
Pool Creation
Rate setting: Lenders propose fixed APR
Term definition: Duration specified (30/90/180 days)
Initial funding: First lenders deposit USDT
Borrower access: Pool becomes available for loans
Active Phase
Continuous lending: New lenders can join anytime
Interest accrual: TP tokens increase in value
Redemption requests: Lenders can exit subject to liquidity
Performance tracking: Real-time pool metrics
Pool Maturity
Final settlements: All loans must be repaid or liquidated
Final redemption: TP tokens redeemed at final value
Pool closure: No new activity accepted
Risk Factors
For TP Token Holders
Liquidity risk: May need to wait for loan repayments to exit
Credit risk: Protected by Bitcoin collateral and liquidation system
Duration risk: Longer pools more sensitive to rate changes
Platform risk: Smart contract and bridge security dependencies
Mitigation Strategies
Diversification: Spread across multiple pools and terms
Active monitoring: Track pool performance and utilization
Exit planning: Understand redemption timelines
Conservative sizing: Don't overallocate to any single pool
Comparing Pool Options
30 days
3-15%
High
Low-Medium
Short-term parking
90 days
11-20%
Medium
Medium
Balanced approach
180 days
13%+
Lower
Medium-High
Yield maximization
The TP token system provides transparent, predictable returns while maintaining the flexibility to exit or trade positions as market conditions change.
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