TomorrowLend Tokens

A unique feature of TomorrowLend transactions is that lenders receive ERC-20 tokens known as TomorrowLend Tokens (TMT) in an amount equal to the repurchase price due to them on the repurchase date. These tokens represent a claim against the Tomorrow Repo and are normalized to convert 1:1 with the underlying purchase token at mturity when burned.

The amount of repo tokens received by each lender is a function of the clearing rate and amount of purchase tokens successfully tendered in auction. The exact formula can be found in the Conventions section.

While lenders are not allowed to redeem prior to the repurchase date, they are free to find willing buyers of their TomorrowLend Tokens if they find themselves in need of liquidity.

To the extent there are insufficient purchase tokens to cover the aggregate repurchase price owed across all borrowers party to a TomorrowLend Tokens, the redemption rate of the Term Repo's corresponding TomorrowLend Tokens will be subject to a haircut applied equally across all lenders.