Maturity & Redemption

A description of the redemption and coordination process for external principal tokens.

Redeeming External Principal Tokens

As external principal tokens (e.g. Swivel, Element, Yield, etc.,) mature, Illuminate redeems each owned external principal token, ensuring a 1:1 collateralization of all iPTs.

This redemption is an asynchronous process performed by keepers, and as each external principal token matures, underlying tokens are returned to Illuminate for users to later redeem.

External PT -> USDC -> Illuminate Vault | Pre-iPT maturity

With this process we ensure the fungibility of iPTs and accommodate external principal tokens regardless of their maturity choice.

Maturity Choice

With external principal tokens redeemed and iPTs fully collateralized, the iPT redemption process can begin.

In order to ensure maximal liquidity, Illuminate attempts to integrate all PTs within a reasonable (2-3 week) range, and iPT maturities are aligned with the last maturing external PT.

E.g. In the example above, Element's PT matures last, on Sep 30th. Therefore, Illuminate's iPT matures on Sep 30th as well.

Redeeming iPTs

Given our integration of EIP-5095 for our iPTs there are multiple routes for redemption.

Direct Illuminate Redemption

Once maturity has hit, users can redeem their iPTs through our Redeemer. This is the most gas efficient method, iPTs are burnt, and lenders are returned 1:1 amounts of underlying.

EIP-5095 Redemption

Developers / Integrators may find it easier to redeem through the methods available on the iPT itself.

This alternate method of redemption allows lenders to redeem their iPTs through solely the iPT interface.

This ensures secondary markets do not need to interact with the core Illuminate codebase, and redemption to third party wallets or other applications can be seamless.

Automated Redemption

With our custom EIP-5095 implementation, users can approve third-party redemption of their iPTs.

Through this functionality, users can enable automatic redemptions handled by third-party keepers through Illuminate's Redeemer.