Issue Junior Token

A Junior Token represents a leveraged looping position as a standardized, fungible token. You contribute your position to a shared vault and receive Junior Tokens; you redeem them to take a position back out.

Naming convention

• Symbol: jr-[collateral]-[debt]-[protocol]-[leverage]x

• Name: Bondify Junior - [collateral]/[debt] ([protocol]) [leverage]x

• Protocol codes: SLF → SLF, Aave → AAVE, Morpho → Mor

Example, a 5× sUSDe position funded by SLF with USDC debt:

• Symbol: jr-sUSDe-USDC-SLF-5x

• Name: Bondify Junior - sUSDe/USDC (SLF) 5x

Why standardize. A position's risk depends on its leverage, so two positions at different LTVs aren't comparable and can't trade against each other. The vault holds every position at one target LTV, which makes them identical: same collateral, leverage, and funding source means the same token. That sameness is what lets a market price and trade them.

What the vault does. The vault is a shared pool of looping positions. Each Junior Token is worth the pool's NAV divided by token supply, its per-share value. Minting and redeeming move proportional value in and out, so they don't change the per-share value; only yield (up) and losses (down) do. The redemption value rises when yield outpaces borrow cost and falls when it doesn't, which makes the token a clean price for leveraged yield exposure.

Mint. Contribute a position and receive tokens equal to your NAV divided by the per-share value. If your LTV differs from the pool target, the protocol adjusts at entry: above target, you repay the excess debt first; below target, the protocol returns the excess collateral to your wallet. Either way you keep the difference, and the pool stays at one LTV.

Redeem. Burn tokens for a proportional share of the pool. A full redemption returns the entire pool position; a partial one returns a new independent looping position with the matching collateral and debt.

Active LTV management. The protocol rebalances the pool to hold the target LTV. If price moves push it out of range, it deleverages back. While deleveraging, mint and redeem pause.

Buying and selling. Because every token in a pool is identical and continuously priced, you can buy or sell instead of building or unwinding.

Why buy:

• No borrow capacity. When the SLF pool has hit its cap, you can't open a new position. Buy an existing one for instant managed leverage.

• Discount. When sellers want out quickly, tokens can trade below NAV, so you enter cheaper than building from scratch.

Why sell:

• Skip the unstake wait. Unwinding yourself runs over the underlying unstake cycle, multiplied by leverage. Selling exits in one transaction, at NAV minus the cost of deleveraging at the standard leverage.

• Premium. When no one can borrow, new supply dries up; if demand outruns supply, tokens can trade above NAV.

• Imbalance. Any gap between buy and sell flow moves the price either way.

How the market prices it

A Junior Token's trade price is set on Bondify's secondary market for leveraged positions. Five principles drive how that price is formed.

• NAV is what the position is worth on paper, collateral minus debt. It's a reference, not a price you can actually trade at.

• NAV + slippage is what it costs to build the position yourself by looping. Above this, no one would ever buy from the market.

• One-shot exit cost is what you'd lose to exit your own position cleanly: wait one underlying unstake cycle and pay accrued borrow cost on the debt during the wait. Doable only if you have spare cash to repay debt.

• Loop-by-loop exit cost is what it costs sellers without spare cash. They have to unwind a slice, wait a full unstake cycle, repay, then free the next slice — many cycles, total cost much higher.

• Ask is the market's sell price. It floats with supply and demand; the band between the two exit costs is its typical range, but it can sit above when supply is tight (sellers gain by selling instead of exiting themselves) or below when sellers are forced.

• Bid is the market's buy price. It sits below the ask, and the gap is the LP's profit margin — LPs supply USDC and JR so users can trade instantly, and the spread is what they earn for providing that service.

Bid and ask, not one price. When you sell, you receive the bid; when you buy, you pay the ask. The cost of the spread is paid by whoever actually trades, not by LPs holding inventory. Unlike a single-price AMM, where the pool quotes one price and arbitrageurs pick off whichever side is mispriced, Staple keeps the buy and sell prices explicitly apart so LPs are paid by the trading flow itself.

The spread responds to market state. The width of the spread isn't fixed. It moves with the state of the market.

Anyone can quote, not only the protocol

Bondify has two channels running side by side. The PMM (pooled market maker) is the protocol's own quote, always-on and algorithmic. OTC is a public quote board where any user can post a fixed bid or ask at any price, with no obligation to match the AMM. The two channels are independent: an OTC price can sit outside the AMM's current bid and ask, and that's by design. When they diverge, arbitrage pulls them back together, and that arbitrage is what brings outside liquidity in.

The net effect: an illiquid, leveraged position gets a continuous, live price that reflects what the market is actually willing to clear at, not just what the math says it should be worth.