stTBY Product Docs

stTBY: A stablecoin that pays out yield and can only be minted and backed by 6-Bloom Protocol (bloom.garden) TBYs.

TBYs are simple 6-month fixed-income debt tokens that pay set rates approximately 0.7% beneath the present treasury bill rate. All TBYs have the same dynamic interest rate coming from the same oracle (BPSFEED). TBYs generate yield by lending to qualified market makers, who must over-collateralize the loan with treasury bill tokens. However, they do vary in their maturity dates. stTBY serves to make these TBYs fungible and liquid in one single basket that distributes yield for them all.

stTBY and wstTBY should function analogously to stETH and wstETH, in terms of the way they pay out yield from underlying TBY’s or ETH and its staking rewards.

The big and obvious difference for us is the simplicity – there is no MEV, distributed miners, priority fees, etc. The similarity is simply in the stETH and wstETH tokens serving as yield-bearing versions of their underlying. In stTBY's case, the yield source is much much simpler, as described above (TBY’s).

The Problem

The basic problem stTBY is trying to solve is a duration mismatch and creating fungibility for a non-fungible market of bonds with different maturity dates, such that we can produce a token that is scalable within the context of DeFi.

What does stTBY do?

High level:

stTBY rolls TBYs into every new duration and constantly earns yield

stTBY pays out the yield to holders when available, on the redeem cadence

stTBY is tradable 1:1 for USDC

What can a user do?

1. Mint stTBY with TBY or USDC

2. Redeem stTBY for USDC subject to withdrawal queue

3. Wrap stTBY for wstTBY

4. Trade stTBY 1:1 for USDC, or trade wstTBY with a variable price point on the open market

Fees

The protocol takes a 0.01% mint fee, 0.5% redeem fee and 10% performance fee.