Spread¶
Each offer is a true sale of the volumetric energy receipts. The discount you accept is the notional spread retained by the platform over the duration of the obligation. Use of terms like "spread account" and "accrual" describe the timing of fee recognition; they do not characterize the transaction as a loan.
When your offer matches, the discount you accept becomes the spread held against your sale.
How Spread Works¶
At Mint Time¶
When your offer matches:
Spread = Reference Price × Discount × Years × Quantity
You Receive = Reference Price × (1 - Discount × Years) × Quantity
- Spread is held in a separate account (not immediately earned)
- You receive the remainder as payment
Example:
| Item | Value |
|---|---|
| Quantity | 1,000 tokens |
| Reference Price | $100 |
| Clearing Discount | 5% |
| Duration | 36 months |
| You Receive | $85,000 |
| Spread Held | $15,000 |
Over the Duration¶
Spread accrues linearly over the duration:
- 12 months: Faster accrual
- 36 months: Slower accrual
Regular accrual transfers a portion from the spread account to platform fees.
On Early Burns¶
If tokens burn before the spread fully accrues:
- Unaccrued spread is refunded to you
- Accrued spread is not refunded
- Refund is proportional to burn quantity
Accrual Example¶
| Time | Days | Accrued | Remaining |
|---|---|---|---|
| Start | 0 | $0 | $5,000 |
| 3 months | 90 | $1,233 | $3,767 |
| 6 months | 180 | $2,466 | $2,534 |
| 12 months | 365 | $5,000 | $0 |
Refund on Early Burn¶
Scenario: 6 months into a 12-month period, 20% of tokens burn.
| Item | Value |
|---|---|
| Total spread | $5,000 |
| Accrued (6 months) | $2,500 |
| Remaining | $2,500 |
| Burn quantity | 20% |
| Refund | $500 (20% of $2,500) |
After this burn:
- Supply remaining: 800 tokens
- Remaining spread: $2,000
Refund vs Forfeit¶
Unearned spread is handled differently depending on how the obligation ends:
| Event | Unearned Spread |
|---|---|
| Burn (investor exits) | Refunded to you |
| Buy-Back (you exit) | Forfeited to platform fees |
Why the Difference?¶
- Burns: You didn't initiate the exit, so you get the unearned spread back
- Buy-Backs: You chose to exit early, so the unearned spread is forfeited as an early termination cost
Tracking Your Spread¶
Each fill tracks:
| Field | Description |
|---|---|
| Total Spread | Spread collected at mint |
| Consumed | Amount accrued to fees |
| Refunded | Amount returned on early burns |
| Forfeited | Amount lost on buy-backs |
| End Date | When the duration ends |
Remaining = Total - Consumed - Refunded - Forfeited
Next Steps¶
- Settlement - How settlement works
- Buy-Backs - Retiring obligations early
- The Auction - How offers are matched