Liquidity Engine (Principal/Yield Separation Engine)

Functionality Description

The Liquidity Engine is the core innovation component of IOST 3.0, implementing principal-interest separation of bonds and revolutionizing the operation mode of traditional bond markets. It separates bonds into principal components (P-Bond) and yield components (Y-Bond), significantly improving capital utilization efficiency, enhancing liquidity, and meeting the needs of investors with different risk preferences.

Core Components

1. Separation Engine

   • Function: Separates bond assets according to optimized ratios
   • Technical Features: Smart separation algorithms, automatic calculation of optimal separation ratios
   • Innovation Points: Supports multiple separation ratio configurations, default 95:5 (principal:yield)
   • Application Scenarios: Institutional asset portfolio optimization, yield stream separate trading

2. P-Bond Manager

   • Function: Manages the complete lifecycle of principal bonds (P-Bonds)
   • Technical Features: Automatic maturity conversion mechanisms, par value convergence algorithms
   • Innovation Points: Multi-term strategies, gradient maturity design
   • Application Scenarios: Principal-protected investments, liquidity planning

3. Y-Bond Manager

   • Function: Manages yield bonds (Y-Bonds) and their yield streams
   • Technical Features: Yield calculation and prediction models
   • Innovation Points: Yield stream optimization and risk adjustment
   • Application Scenarios: High-yield pursuit investments, yield stream trading

Technical Highlights

1. Capital Efficiency Multiplication

   • Unlocks idle capital in fixed-income assets
   • Separates yield streams, enabling double utilization of capital
   • Improvement in capital efficiency

2. Fine-Grained Risk Allocation

   • P-Bonds provide lower risk with par value recovery guarantees
   • Y-Bonds provide higher risk with higher return potential
   • Meets the needs of investors with different risk preferences

3. Enhanced Liquidity

   • Separated bond components have greater liquidity than whole bonds
   • Promotes secondary market activity
   • Reduces trading friction and slippage costs

4. Maturity Strategy Optimization

   • Staggered maturity design avoids liquidity shocks
   • Automatic rollover mechanisms maintain long-term stability
   • Supports early exit options, enhancing flexibility

Key Interfaces

• splitBond() - Separates assets into P-Bond and Y-Bond
• getPBondInfo() - Gets P-Bond details (value, maturity date)
• getYBondInfo() - Gets Y-Bond details (yield rate, distribution history)
• calculateSplitRatio() - Calculates optimal separation ratio
• getMaturitySchedule() - Gets maturity schedule