The trio of DeFi lending markets - Maker, Aave and Compound - have locked positions of up to $40B, but all these protocols have one thing in common: they are over-collateralised. For the same asset, different agreements have different collateralisation rates, some at 150%, others at 200% or more. There are also "pain points" such as protocol governance overheads, unitary collateral assets and prophecy machine attacks. There is no doubt that this guarantee mechanism makes the asset very inefficient!

TimeSwap was incubated for 2 years before launching its main website on 21 March 2022 to address these market pains.

TimeSwap

An AMM-based lending protocol and the first no-permit, no-predictor, fixed-term DeFi lending agreement designed to improve asset utilisation by calculating interest and collateral through an AMM mechanism with three constant variables similar to Uniswap.

1. Oracle-less: Borrowing and lending of assets is determined by the demand and supply of tokens in the pool, without the need for a prediction machine.
2. Oracle-less fixed term lending: allows users to borrow for a fixed term against any ERC20 token and use any other ERC20 token as collateral.
3.Non-Liquidatable Loans: no liquidation penalties and no reliance on liquidators.
4. Market-driven interest and collateral: lenders, borrowers and liquidity providers interact with our pool of funds through the execution of transactions, changing the availability of assets and therefore the interest and collateral required for each transaction. This dynamic interest rate and collateral element ensures greater capital efficiency and flexible risk management.
5. Minum attack: As Timeswap has no predictive mechanism, the protocol is much less likely to be attacked.

TimeSwap AMM

Timeswap AMM works on a unique 3-variable constant equation: X x Y x Z = K, where interest rates and collateral coefficients are market driven, not dependent on a prediction machine and no liquidators, making Timeswap a completely self-sufficient agreement. Anyone can create a pool with any ERC20 token as collateral and any other ERC20 token as an asset to be lent/borrowed, with any maturity date.

1. X: The principal pool, which is the amount of assets available for borrowing in the pool.
2. Y: Interest rate pool, which determines the amount of interest per second in the pool. Where Y/X is the maximum interest rate per second in the pool.
3. Z: The collateral factor pool, which determines the collateral to be locked up by the borrower. Where Z/X is the minimum collateralised debt position (CDP) of the pool.
4. K: Constant constant K.
5. C: Collateral pool, which refers to the amount of ERC20 collateral tokens that the borrower has locked into the pool.
6. A: Asset pool, the number of ERC20 asset tokens locked in the pool, being the sum of assets lent by the lender and debt paid by the borrower.
The lender and borrower can change the variables X, Y and Z so that the constant constant K is always maintained, allowing for real-time market prices for interest rates and collateral factors. At the same time, in order to keep the product constant, Y and Z will be reduced, which in turn reduces the interest rate and CDP/insurance coverage for the next lender.

For lenders: a lower APR will result in a higher sum insured and a higher APR will result in a lower sum insured.

For borrowers: a lower APR will lock in a higher collateral amount, a higher APR will lock in a lower collateral amount.

Native Tokens

$Time: governance token for voting governance protocol rates, LP handling fees, strategic partnerships, Dao treasury management and future product development, remaining details not yet disclosed.

$BPT: ERC-20 tokens issued to lenders as a receipt for the deposit of their assets into their principal pools. Upon maturity of the principal pool, the BPT can be redeemed for the exact amount of underlying assets in the pool (as long as a sufficient number of underlying assets exist in the pool). For example, a subscriber has 30 $BPT in the DAI-WETH pool, which expires on 30 December 2021. Assuming there are sufficient assets in the principal pool at maturity, the user can exchange his tokens for 30 DAI after 30 December 2021.

$BIT: ERC-20 tokens issued to lenders to account for interest receivable on redeemed BITs are used to ensure that lenders have a unit of account for their interest receivable and agree to receive the interest due based on the number of BITs they hold. For example, if a subscriber holds 20 $BIT and their claim to the DAI-WETH pool expires on 30 December 2021, then after that date, the subscriber can claim 20 $DAI from the pool as interest due to them.

$IPT: The ERC-20 tokens issued to lenders to hedge against borrower default risk are intended to protect lenders from defaulting borrowers. If for some reason the lender does not recover the equivalent amount lent to the pool, the $IPT held will allow the lender to make an insurance claim against the borrowers risk of default are intended to protect the lender from defaulting borrowers. If for some reason the lender does not recover the equivalent amount lent to the pool, the $IPT held will allow the lender to make an insurance claim against the borrower's defaulted collateral. E.g. a subscriber with 1 $WETH insurance policy in the DAI-WETH pool expiring on 30 December 2021, if the subscriber is unable to redeem 10% of its $BIT, the lender may claim a claim for $0.1 $WETH of collateral.

$LT: An ERC-20 token issued to liquidity providers to evidence their assets and collateral deposited in the pool. This token functions similarly to LP tokens elsewhere in DeFi, with LPs being able to withdraw their liquidity as the pool matures. In return, LPs receive a transaction fee paid by the lender and borrower. For example, there is a DAI-WETH pool that expires on 30 December 2021 and a subscriber owns 10% of all LTs in the pool. After taking into account all transactions and settlements, there are 1000 DAI and 2 ETH left in the pool. The user will then receive 100 DAI and 0.2 ETH from the pool.

$CDT: NFT issued to the borrower as a receipt for the debt they owe. The borrower must repay the debt before maturity in order to withdraw the locked collateral. If the borrower fails to repay the debt, the collateral will be forfeited and distributed to the lender. For example, a user with a DAI-WETH pool of collateralised debt tokens maturing on 12-30-2021 has 0.2 WETH locked up as collateral for a 300 DAI debt. If the user pays off the 300 DAI debt by 12-30-2021, the user can burn their $CDT to withdraw the 0.2 WETH locked up as collateral.

Arbitrage Mechanisms

1. External arbitrage: Using other DeFi agreements such as Aave or Compound or fixed term agreements (e.g. Notional Finance or Yield agreements). If Timeswap lending rates are higher than Notional or Yield, users can borrow from the external market and lend to Timeswap pools with similar maturities. Similar transactions can also be executed on the borrower side when there is an imbalance between the markets.

2. Internal arbitrage: Between the two Timeswap pools, consider two DAI-MATIC pools with similar maturity dates. Pool 1 offers an interest rate of 13.5% per annum and pool 2 offers 18.5%. You could borrow money from the pool with the lower rate and then lend it to the pool with the higher rate, making a ~5% profit on this transaction. Given the similar maturity of the two pools, users can make a profit. However, if the pools have wider maturities, then the user must also take into account time preferences when arbitrage.

Financing Information

TimeSwap seed round was led by Multicoin Capital, with participation from Mechanism Capital & DeFiance Capital, for an undisclosed amount.

Angel Investors:Balaji Srinivasan, Surojit Chatterjee, Mihailo Bjelic, Ryan Sean Adams, Alex Svanevik, John Lilic, Julien Bouteloup, Larry Cermak, Mika Honkasalo, Kenzi Wang, Calvin Liu, George Lambeth, Vaibhav, Sina Habibian, Tanmay Bhat, Akshay BD, Ajit Tripathi, Min Kim, Sanket Shah, Sachin Tomar, Ajeet Khurana .

Team

The team is mostly from India and the three co-founders also have project development/management experience.

1. Ricsson Ngo: A Masters graduate in Applied Mathematics in Finance from one of the top universities in the Philippines and a full-stack developer who was the editor of the most popular smart contract development course on Udemy, Ricsson was inspired by Uniswap and started building a permissionless and prediction-free lending marketplace in late 2019, which later laid the foundation for The foundations for Timeswap were laid.

2. Harshita Singh: a well-known alumna of Indias largest FMCG group. She was also the winner of the ETHIndia Hackathon 2020 and was involved in the development of DeFi Portfolio Manager - SaviFi.

3. Ameeth Devadas: formerly Head of Product Management for the FinTech platform of Aurigin (the world's largest investment banking platform) and a private banker for leading financial institutions. He has been involved in the crypto industry for over 4 years before founding Timeswap.

Remaining members of the team

Whitepaper：https://timeswap.io/whitepaper.pdf

Official Introduce article：

1. https://timeswap.medium.com/introducing-timeswap-fully-decentralized-amm-based-money-market-protocol-9912e472fb1d

2. https://timeswap.medium.com/timeswap-101-a-simplified-explainer-fe098a2ec378

3. https://timeswap.medium.com/timeswap-native-tokens-50a5da587be0