Tomorrow Repos

The TomorrowLend enables the deployment of Tomorrow Repos. A Tomorrow Repo is a specific on-chain implementation of fixed-rate collateralized lending modeled on tri-party repo in the TradFi context.

Key characteristics of Tomorrow Repos include the following:

• Fixed-time, fixed-rate - Tomorrow Repos involve fixed-time, fixed-rate loans as opposed open-ended, floating-rate loans common in DeFi. Borrowers must repay their loans on the maturity or repurchase date and must do so within the repurchase window.

• Non-callable - Tomorrow Repos are non-callable in that lenders cannot redeem and borrowers cannot repay prior to the maturity or repurchase date.

• Collateralized - Tomorrow Repos are meant to facilitate short-term liquidity management needs and made on an over-collateralized basis backed by liquid digital assets (e.g. wBTC, wETH, USDC, USDT).

• Non-custodial - Collateral backing a Tomorrow Repo is not held in custody but rather locked in a decentralized smart contract (known as a Tomorrow Repo Locker) that is verifiable by both borrowers and lenders in real-time. The Tomorrow Repo Locker does not allow for rehypothecation of collateral and is accessible only by users using their private keys and in strict accordance with the terms of the smart contract arrangement. Each Tomorrow Repo has a separate Tomorrow Repo Locker associated with it.

• Auction mechanism - The interest rate for a Tomorrow Repo is determined by an auction known as a Tommorrow Auction. Each Tomorrow Repo has its own Term Auction.

Tomorrow Repos may differ among each other in the characteristics listed above. For example, one Tomorrow Repo may have a 4-week term while another Tomorrow Repo has a 6-week term.