80/20 Concentrated

A Covenant Market type calibrated for stable-yield collateral.

The 80/20 Concentrated market is a Covenant Market for low-volatility, yield-bearing collateral such as tokenized credit funds (HYBOND, ACRDX, JAAA), tokenized treasuries (BUIDL, JTRSY), yield-bearing stablecoin vaults (sUSDS, sUSDe), and ETH-LST pairs (stETH/ETH, weETH/ETH). Deposits are split into a Yield Coin (senior, ~4% target yield) and a Leverage Coin (junior, ~5x leveraged exposure to the collateral's NAV returns). The narrow price band concentrates liquidity around par, producing tight, low-slippage swaps for both tranches.

Market characteristics

• Low Yield Coin price volatility

• ~5x Leverage Coin neutral structural leverage

• Minimum buffer: 10%

• High LTV and Leverage volatility

• Narrow yield and price bounds

Parameters

Core

Parameter	Value
Neutral LTV	80%
Duration	3 month perpetual
Min / max price	0.97 / 1.00
Swap fee	5 bps
Protocol fee	5% of funding yield

Rates

Parameter	Value
Max rate	16.5%
Neutral rate	4%
Min rate	3.5%

Gates

Parameter	Value
High LTV	90%
Max LTV	96%
Workout rate	-1% daily

Curves

80/20 Concentrated: parameters, funding rate curve, and discount price curve.

As LTV rises, the AMM clears the Yield Coin closer to par, compressing its yield toward the Neutral rate. At low LTV, excess senior supply forces a discount and a higher funding rate. Above the Max LTV gate (96%), workout pricing takes effect (not shown).