Concepts
Market lifecycle
A Sidereal market is born with a fixed end date and settles on it. This page walks the whole arc: what you can do while it lives, what changes at maturity, and what remains open after.
Before maturity: the live market
Every action in the protocol is available while the market is live:
- Deposit / withdraw. Turn cash into SY or back again, at the current exchange rate. Always open, in both directions.
- Split. Lock SY with the protocol and receive equal amounts of PT and YT.
- Recombine. Return equal PT and YT and get the SY back. Split and recombine are exact opposites, and you can cycle between the two forms freely.
- Collect interest. YT holders collect what has built up so far, whenever they like. Collecting early matters: once collected, the interest is yours no matter what rates do afterwards.
- Trade. Swap between PT, SY and YT in the shared pool, or deposit into the pool as a liquidity provider and earn trading fees.
Throughout this phase, the exchange rate drifts upward as the bond’s coupon and maturity cashflow accrue. PT’s price climbs toward one dollar, and YT’s remaining claim shrinks as the time window closes. In the background, the protocol keeps recording the exchange rate at every interaction. These recorded snapshots are called observations, and support live accounting.
At maturity: the rate freezes
Maturity is fixed at deployment. After it passes, the tokenizer synchronizes coupon cash, checks settlement readiness and freezes the terminal SY exchange rate. Pending settlement must finish before redemption can proceed.
From that instant:
- PT redeems through SY. Face amounts convert to SY shares at the frozen rate, capped by the holder’s pro-rata share of backing. There is no deadline; redemption stays open.
- YT stops earning. Interest built up before the freeze can still be collected. The token itself is worthless from here on.
- Splitting stops. A matured market cannot create new PT or YT. There is no future interest left to separate.
After maturity: wind-down
The market becomes a settlement window: PT holders redeem, YT holders make their final collections, and liquidity providers withdraw. The current testnet market is a single fixed cycle. When a successor market opens, moving into it means redeeming here and depositing there; nothing rolls over automatically.
The arc at a glance
| Action | Live market | After maturity |
|---|---|---|
| Deposit / withdraw cash ↔ SY | Yes | Yes |
| Split SY → PT + YT | Yes | No |
| Recombine PT + YT → SY | Yes | No. Redeem the PT instead |
| Collect YT interest | Yes, as it builds up | Final collection of pre-freeze interest |
| Redeem PT for principal | No | Yes, through SY at the frozen rate, capped by backing |
| Trade / provide liquidity | Yes | Withdraw liquidity |
The freeze mechanics (who records observations, what happens if none lands exactly at maturity, and why redemption can never read a post-maturity rate) are covered in Settlement and maturity.