TWIN token model

Assets on TWIN Finance are synthetic assets, that are linked to the price of real world assets. The addition of new assets is permission less, as long as these are included in our oracle smart contract. Right now, more than 400 equities, commodities and fx assets are supported.

When a new asset is created, it has an original duration of one year, and an upperlimit price which is set at twice the current real world price. The real world asset price is provided from the oracle smart contract, which is connected to the Pyth oracle.

When assets are minted, the user pays USDC stable coins as collateral and receives two token: A long token and a short token on the same underlying asset. As there is always the exact same amount of long and short tokens outstanding, a change in the real world price of the underlying asset does not change the collateral required to fund the outstanding assets, as the change of the value of the long token and the short token offset each other.

At maturity, the real world asset price is once more provided by the oracle and each asset receives its value in line with this price, where the value of the short token is defined by the upperlimit minus the real world asset price.

In case that the price of the real world asset is breaching the upperlimit during the duration of the asset, the asset is frozen and the value can be redeemed immediately.