Overall mechanism

Leverage mechanism

The smart contract will lock the underlying asset at several times the market value for xToken(leveraged tokens).The return of xToken depends on the price change of underlying asset.

For example, if a user makes a $100 purchase in the 3x long pool of ETH/USDT, the smart contract will lock up $300 worth of ETH in the contract, and the user will enjoy $300 worth of ETH floating return.

If the price of ETH goes up by 10%, the value of the ETH locked in becomes $330. The floating return of $30 goes to the user, and the value of the principal goes from $100 to $130, hence a 3x (leverage multiple) returns.

The different tranches will be represented by two types of tokens:

• xTOKENs: a leveraged token starting at 3x, although the exact return and exposure are several times that of the underlying. These xTOKENs represents the share of the subordinated tranche.

• bTOKENs: In most cases, bTOKENs guarantees the principal and interest in base currency (e.g. USDT). bTOKENs likewise represent the share of the senior tranche.

Why a structured fund model ?

teeter uses a structured fund model because the current implementation mechanisms for leveraged products currently do not meet two conditions simultaneously: any asset and any exchange. The structured fund model allows us to use the spot price of crypto assets as the underlying assets. In this way, any crypto asset can be leveraged.