Notes

One mint per auction#

Every auction creates its own note mint when it opens. Notes are legacy SPL tokens with 6 decimals, like USDC, and one note stands for one USDC of filled principal. The auction account is the only mint authority, and it mints exactly once per lender claim, never more than the auction matched.

Notes from different auctions are different tokens with separate pools. A default in one auction never reaches another.

Settlement#

An auction can be finalized once two things are true: maturity has passed, and every borrower order in it is resolved, meaning repaid, liquidated, expired or refunded. The keeper sends the finalize instruction; anyone may.

Finalizing fixes the auction's realized proceeds, everything the pool actually received for its loans:

• repayments, principal plus interest,
• payments made by liquidators,
• principal reserved for borrowers who never took their loan, with their bonds.

Redemption#

After finalization, burn any number of notes in Portfolio to receive USDC. With R realized proceeds, M matched principal and b notes already redeemed, burning x notes pays:

floor(R × (b + x) / M) − floor(R × b / M)

The differences of cumulative floors add up to exactly R once every note is redeemed, whatever the order or size of redemptions. No atom is lost or paid twice.

Transfers#

Notes are plain SPL tokens: they move between wallets like any other token, and whoever holds them at redemption is paid. Tenor runs no market for notes. Selling before maturity needs a buyer at a price you agree on.

What does not change a payout#

• USDC sent straight to an auction's pool. Payouts follow realized proceeds, which only program instructions change.
• Other auctions. There is no pooling or subsidy between auctions.
• The advertised rate. Notes pay what was recovered. The clearing rate is what borrowers owe, and it is what notes pay when every loan is repaid.