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:

1. Initial deposit: Receive TP tokens at 1:1 ratio with your USDT

2. Interest accrual: TP tokens increase in value as borrowers pay interest

3. Redemption: Exchange TP tokens back for USDT + earned interest

4. 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	Term	APR	Allocation	Strategy
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

1. Rate setting: Lenders propose fixed APR

2. Term definition: Duration specified (30/90/180 days)

3. Initial funding: First lenders deposit USDT

4. 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

Pool Term	APR	Liquidity	Risk Level	Best For
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.