Make your yields work harder for you.
Tempus allows users to optimize their existing exposure to variable yield to better match their risk profile. Users can deposit their yield-bearing tokens such as stETH (Lido Staked ETH) into contracts with select maturities. These yield-bearing tokens get separated into tokenized Capital and Yield tokens, allowing users to trade them on the Tempus custom AMM.
To demonstrate how Tempus works for liquidity providers, here’s an example of what happens if someone wants to get a high variable yield on their ETH through Lido:
Figure 1: One atomic transaction representing the liquidity provision process on Tempus
- 1.User deposits ETH to Tempus (optional)
- 2.Tempus deposits ETH to Lido, receives stETH
- 3.The TempusPool contract mints Tempus Capital and Tempus Yield tokens
- 4.Tempus deposits (part of) the Capital and Yield tokens to our custom TempusAMM (which is covered elsewhere) as a liquidity provider
Liquidity Providers end up holding a combination of either Capital or Yield tokens (depending on the current market implied yield) and Tempus LP tokens. Swap fees are generated by being a liquidity provider to the Capital/Yield pool, which is being utilised by everyone who uses the protocol to hedge or trade future yields.
This means LPs are earning two sources of income:
- 1.yield from the underlying protocol (in this case ETH staking rewards), plus
- 2.swap fees from the AMM, at the same time, aggregated into one high yield.