Element Finance · interactive mechanism simulation

Depositors split a yield-bearing position into a Principal Token (par at maturity) and a Yield Token (variable yield). PT trades at a discount on a time-decaying Convergent Curve Pool — that discount is the fixed rate. When a term matures, liquidity must migrate to a fresh tranche: the pool's depth crashes and slowly re-seeds.
Depositors deposit underlying Tranche contract term: 90d Yield vault 6.0% variable APY Convergent Curve Pool PT 0.988 · par 1.000 YT holders 0.0 yield accrued Maturity redemption reseeds in 90d
Underlying deposited
0 units
PT price (par 1.000)
1.000
YT yield accrued
0.0 units
Terms expired / re-seeded
0
Parameters — edit me
90d
6.0%
5.0%
0.8/s
3.0 d/s
Controls

Illustrative simulation. Models the researched Element Finance mechanism — a Tranche splits deposits into a Principal Token (redeemable at par at maturity) and a Yield Token (variable yield claim), with PT priced below par on a time-decaying Convergent Curve Pool. At each term's maturity, liquidity must migrate to a freshly seeded pool, which is why "Force term expiry" crashes pool depth — a simplified illustration of the liquidity-fragmentation dynamic described in the research, not live onchain data. Part of The Onchain Experiment Atlas.