Providing liquidity on Fira is different from variable-rate LPing you may have done elsewhere. Markets have end dates. Your pool's composition shifts over time. And exit mechanics depend on whether you wait for maturity or leave early. Here's what to expect at each stage.

When you deposit USDC into a fixed-rate market, you choose both the market (e.g., USDC) and the maturity (e.g., May 7, 2026). The protocol then:

You don't need to manually manage the BT/FW split — the pool handles it automatically. What you receive back reflects the pool's current state at the moment of deposit.

Your LP token accrues value from three yield sources running in parallel: swap fees, net lending interest accumulating in the BT holdings, and rehypothecation yield flowing through the FW exchange rate.

As the market matures, you'll notice two natural dynamics:

Trading activity tapers off near maturity. As the expiry date approaches, traders have less incentive to enter new positions. This reduces fee income in the final stretch. However, settlement interest — the BT converging to par — compensates: the closer to maturity, the more of that discount-to-par gap closes, and that value accrues to the pool.

BT converges toward full value. BT starts trading at a discount and climbs toward 1:1 with FW as the maturity date approaches. This convergence is predictable and is where a significant portion of LP return is realized.

When the market expires, the pool unwinds automatically. BT redeems 1:1 for FW-USDC, and you receive your full proportional share of the pool in FW-USDC. You then unwrap FW-USDC back to USDC at the current exchange rate.

This is the cleanest exit path. At maturity there is no slippage, no price impact from BT, and no uncertainty about the BT component's value. If you can wait until the expiry date, that is always the most predictable outcome.

If you want to continue providing liquidity after the market expires, you redeem your position and deposit into a subsequent maturity market. This roll must be completed within 48 hours of the prior maturity. Multiple rolls are possible across available maturities.

There are no fees for rolling. The process is: redeem → deposit into next market.

You can exit at any time before maturity. When you redeem your LP token early, you receive your proportional share of the pool's current BT/FW composition.

The FW component can be unwrapped to USDC immediately. The BT component trades at a discount — you have two choices:

This is a key property of fixed-rate LP positions: illiquidity at a given moment does not mean a loss. It means patience is required to realize the full value.

Impermanent loss from pool composition shifts. As implied rates move, the BT/FW ratio in the pool shifts. If you exit when the pool has moved significantly from your entry composition, you may receive more BT and less FW than you expected — and selling that BT early incurs slippage.

Reduced activity near maturity. Fee income naturally declines as the market approaches expiry. This is expected behaviour, not a malfunction. Settlement interest from BT convergence partially offsets it.

Partial rehypothecation. Approximately 10% of FW reserves are deployed into variable-rate vaults. In extreme conditions, if variable-rate utilization is very high, a large withdrawal request could temporarily face a delay while the protocol rebalances. This is uncommon — the reserve ratio is actively maintained — but it is worth knowing.