ELYFI generates and destroys various types of tokens. Tokens represent the participant status at a given time. The types of tokens consist of ABToken, AToken, LToken, and DToken.
Borrowers can entrust their real assets as collateral to a collateral service provider in order to create a bond secured by real assets and then issue an Asset Bond Token (ABToken). This is a token that is different from other DeFi in that it is linked to a bond.
ABToken is based on the ERC721 standard developed for the Ethereum blockchain for non-fungible tokens and is issued after executing various legal and administrative procedures and a contract in reality. Through the issuance of ABTokens, borrowers can tokenize real assets, connecting “real world” assets with crypto assets in the financial markets.
A borrower can deposit ABTokens issued through a collateral service provider in the Money Pool and take out a loan. The loan is determined based on the value of the ABTokens issued by the collateral service provider. As soon as the tokens are deposited in the Money Pool, and the loan is taken out, the tokens are locked. The ABTokens can be unlocked only when the loan and interest are settled normally. The collateral can be reclaimed by redeeming the ABTokens to the collateral service provider. After undergoing the process to seize the collateral, the ABTokens are destroyed or “burned” at the same time as the bond expires.
By depositing ABTokens in the Pool and locking them, investors can directly invest in the ABTokens deposited as collateral and receive interest accruing from the ABTokens.
In such cases, securitized ATokens are issued to indicate that the investors have invested in asset-backed bonds. The investors can invest, redeem, and receive rewards for a single bond, interacting with ATokens. ATokens also refer to the amount invested in ABTokens by investors. From the moment the investors come into possession of ATokens, the interest rewards incurring from the ATokens are recorded. The compound interest is calculated by block, and the owner of the ATokens can obtain rewards at any time they wish.
ATokens cannot be issued for more than the value of the ABTokens, and upon expiration of the ABTokens, they are recovered from the holders and destroyed.
Money Pool investors can deposit certain cryptoassets in the Money Pool and receive interest income proportional to the assets deposited in the Money Pool. When Money Pool investors deposit cryptoassets, they receive LTokens equivalent to the amount of the deposits. LTokens are backed by cryptoassets deposited in the Money Pool in a 1:1 ratio. Owners of LTokens can withdraw the tokens to exchange with crypto assets in a 1:1 ratio when they wish. LTokens are the basis for repayment of loans and interest on their investments. Users can also borrow other types of tokens or purchase ATokens through LTokens.
LTokens comply with the ERC20 token standard. When Money Pool investors deposit or withdraw assets from the Money Pool Contract, the protocol automatically issues or destroys LTokens accordingly.
When borrowers borrow cryptocurrencies with real assets or cryptoassets as collateral, DTokens are is issued and transmitted to the relevant deposit address. DToken is an indicator of how much debt the corresponding address has. It also represents the cryptocurrency units that need to be deposited in order to unlock the assets deposited in the Money Pool.
DTokens comply with the ERC20 token standard, but as it is part of the tokenization strategy used to indicate borrowing status, there are restrictions on transmission. When borrowers deposit cryptocurrencies received as a loan in the Money Pool, DTokens are automatically destroyed when the debt is repaid. As loan interest accumulates, the DToken balance sheet total continues to increase.