Coupon Tokens (CT) are the instrument through which Fira makes yield directly tradable. Here's how CT markets work in practice.
Where CT trades
CT trades on Fira's fixed-rate market AMMs — the same infrastructure that prices Bond Tokens (BT). All trades are executed on-chain, atomically. There is no separate order book; price is determined by pool composition and trading activity.
How CT is priced
The CT price at any moment reflects market expectations for future rates. Specifically:
If the market expects high accumulated yield by maturity, CT costs more today
If expectations are low, CT is cheap
This makes CT a pure rate-directional instrument: you're not lending, not borrowing — you're taking a position on where rates are heading.
What happens at maturity
At maturity, CT settles at its final value: the total interest accumulated by the underlying position over the full term. This is determined by actual rehypothecation yield earned, not by any estimate made earlier. If rates were higher than the market expected, CT holders benefit. If rates disappointed, CT holders receive less than they paid.
Before maturity: sell anytime
You don't have to hold CT to maturity. CT can be resold on the AMM at market price at any time. This lets you:
Take profits early if rates have already moved in your favor
Cut losses if your thesis isn't playing out
Liquidity conditions and time to maturity will affect the price you can achieve on exit.
Risks to understand before trading CT
CT is a directional instrument with asymmetric downside. Key risks:
Risk | What it means |
Near-zero value | If market rates remain very low through maturity, CT can settle close to $0 |
Total loss | Possible — CT has no floor value; the full purchase price can be lost |
Liquidity | Thin markets before maturity may make exiting at a fair price difficult |
No income | CT doesn't generate interim cash flows; it settles in a single event at maturity |
Who should trade CT
CT is suited for users who have a specific view on where interest rates are going and want direct exposure to that view without opening a lending or borrowing position.
Typical profiles:
Experienced rate traders positioning around rate movements
Hedgers who want to offset rate risk from other DeFi positions
Protocols seeking on-chain rate exposure for treasury or liquidity management
Not there yet? If you're still getting familiar with Fira's lending and borrowing mechanics, start there first. CT trading assumes a solid understanding of how fixed-rate markets work.
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