iPTs: Meta Principal Tokens
The core mechanism behind the Illuminate Protocol is the wrapping of external principal tokens into "meta" principal tokens, Illuminate PTs (iPTs).
At any point before maturity approved principal tokens can be wrapped at a 1:1 ratio by Illuminate, returning iPTs.
iPTs trade freely on secondary YieldSpace markets and are only minted when external PTs provide arbitrage opportunities.
Because all external principal tokens are redeemed by Illuminate before an iPT's maturity date, iPTs are always collateralized 1:1 by underlying deposits in time for redemption.
This means that they are redeemable at a 1:1 ratio for underlying tokens upon maturity, and follow a standard interface allowing the easy integration of Illuminate into any dApp or wallet.