Buying Fixed Rate Assets

How do I buy fixed rates / discounted assets?

To buy fixed rate interest, simply launch the Element platform and click on the Fixed Rate tab at the top left of the page.

Within this page, you will be given the option to select which discounted asset you would like to buy and start earning a fixed rate interest after making the purchase.

Fixed Rates are earned by purchasing the liquidity provider's Principal Tokens at a discount.

Where does the fixed rate come from?

The fixed rate comes from a user exiting their principal token position before their term has matured. The willing buyer of that position will purchase the principal token at a discount due to the opportunity cost of waiting out the remainder of the term duration.

What are Principal Tokens?

Principal Tokens are minted and issued to depositors of the Element protocol when they have selected a term lockup period. The Principal Tokens are redeemable 1:1 for their base deposit amount at the end of the Term Period.

How much will I earn?

Users who purchase principal tokens determine their fixed rate dependent on the discounted rate of the asset at purchase time. Buyers of principal tokens that have yet to reach maturity will be trading at a discount to its underlying represented asset. The further away from maturity the principal token is, the higher the discount.

If a user purchases a 10% discounted principal token redeemable in a 12-month term, it is effectively a 10% fixed rate. Each asset has its own dedicated market of supply and demand along with the priced discounts (fixed rate APY). Note that the fixed rate APY is subject to change from time to time.

How do I redeem?

To withdraw your earned fixed rates, at term maturity the user can choose to redeem their principal token at a 1:1 value to the represented asset. If you would like to withdraw early and redeem your earned fixed rate yield before the term's maturity date, you may sell it into the AMM to earn the fixed rate up till that point priced by the secondary market.

You can find the matured assets under My Portfolio.

Assets that you currently hold are displayed at its current present value as well as the amount of time till maturity. The Fixed Rate APR is broken down into yearly, monthly, and daily.

Upon Maturity the Redeem button will light up and appear as so: