Spread¶

Each offer is a true sale of commodity volumes documented by 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 is matched with mint orders, the discount you accept becomes the spread held against your sale.

How Spread Works¶

At Mint Time¶

When your offer is matched with mint orders:

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:

Over the Duration¶

Spread accrues over the duration using the original issue discount (OID) method. The platform calculates the accrued and unaccrued amounts under the applicable OID schedule and transfers accrued spread from the spread account to platform fees.

On Early Burns¶

If tokens burn before the spread fully accrues:

• The platform calculates accrued and unaccrued spread using the OID method as of the settlement date
• The applicable unaccrued spread is refunded to you
• Accrued spread is not refunded

Refund vs Forfeit¶

Unaccrued spread is handled differently depending on how the obligation ends:

Why the Difference?¶

• Burns: You didn't initiate the exit, so the applicable unaccrued spread is refunded
• Buy-Backs: You chose to exit early, so the applicable unaccrued spread is forfeited as an early termination cost

Tracking Your Spread¶

For each receipt obligation, associated accounting records track:

Remaining = Total - Consumed - Refunded - Forfeited

Next Steps¶

• Settlement - How settlement works
• Buy-Backs - Retiring obligations early
• The Auction - How offers are matched with mint orders