Rocket Start in the New Quarter

Mastering Itayose & Auto-Rolling

TL;DR: The quarter-end is approaching, and Secured Finance will launch a new ZC bond orderbook on December 27, 2024. Get ready for Itayose to ensure fair price discovery, leverage Auto-Roll for hands-free reinvestment, and join our special campaign on Galxe for extra perks!

As we approach the end of 2024, how are you faring? At Secured Finance, another quarter-end is fast approaching, and with it comes the launch of a new orderbook. On December 27, 2024, the current nearest-maturity orderbook will expire, making way for a new zero-coupon bond (ZC bond) market with a December 2026 maturity.

Before this new market officially opens, we will conduct the “Itayose” (pre-open) process. In addition, the Auto-Roll feature can help you maintain a strategic, efficient investment approach as you transition into the new period. Let’s take this opportunity to revisit how both Itayose and Auto-Roll work as we close out the year.

What is Itayose? The Pre-Open Process for Price Discovery

Itayose is a special pre-open process conducted just before the new ZC bond orderbook officially starts trading. During the Itayose phase, users can place limit orders in advance. When the market opens, these pre-submitted orders are used to achieve fair, efficient price discovery and ensure sufficient liquidity from the start.

How Itayose Works

1. Pre-Open Period (7 Days Before Trading):
   In the days leading up to the market’s official start, the new orderbook is visible, and users can submit limit orders (bids or offers) in advance. Although no trades occur during this period, you can see at which price levels orders are accumulating, allowing you to adjust your pricing strategy accordingly.
2. Orderbook Lock (1 Hour Before Start):
   Shortly before the market opens, the orderbook is locked. No new orders can be added, canceled, or modified. This “freeze” ensures a fair snapshot of supply and demand as we approach market opening.
3. Itayose Execution (Market Open):
   At the moment the market goes live, the system matches all overlapping buy (bid) and sell (offer) orders. It identifies the price level at which the largest possible volume can be executed.

• Maximum Volume: The system searches for the price range where the highest trading volume can occur.
• Balancing Supply and Demand: If there are multiple price points offering similar trading volume, the system chooses the one that best balances supply and demand.

The price determined at this stage becomes the “opening price,” enabling the market to start off transparently and efficiently.

Price Discovery During Itayose

Itayose ensures fair price formation (price discovery) by consolidating all pre-open orders. By determining the opening price from aggregated supply and demand, the market begins trading without sudden price distortions, providing a stable environment from the start.

What is Auto-Roll? Seamless Continuation of Positions

Auto-Roll is a feature that automatically reinvests your matured position into the next 3-month period. Instead of manually finding a new counterparty or adjusting your strategy every time a bond matures, Auto-Roll keeps your investment running smoothly and efficiently.

Auto-Roll in Detail

1. Automatic Renewal:
When your position reaches maturity, Auto-Roll automatically carries it over to the next available period without any manual intervention required.

2. Price Waterfall Mechanism:
To ensure fair pricing at roll-over, a “price waterfall” mechanism is used:

• Stage 1: If there have been sufficient trades in the last 6 hours, the Volume-Weighted Average Price (VWAP) from that period is used.
• Stage 2: If no trades occurred recently, the system extends the time window or uses the “Last Traded Price” as a reference.
• Stage 3: In the rare case there have been no trades for a very long period (e.g., three months), the previously used roll price will be applied as a fallback.

This tiered approach ensures that even in low-liquidity conditions, Auto-Roll executes at the most reasonable possible price, thereby maintaining your investment continuity effectively.

3. Efficiency and Stability:
Auto-Roll allows you to maintain a consistent investment strategy without the repeated effort and cost of manually reinvesting at every maturity. It ensures stable, ongoing growth opportunities while minimizing the risk of missed chances.

Campaign Using Galxe

We’re also planning a special quest utilizing “Galxe,” a Web3 platform, to coincide with the upcoming Itayose. Participating in this campaign may grant you certain benefits or incentives.

What’s Next

In this article, we provided an overview of Itayose and Auto-Roll, and how they facilitate smooth market launches and seamless reinvestment at quarter-ends. We will publish a separate, step-by-step guide complete with UI screenshots and hands-on instructions to help you navigate the process confidently.

Until then, we wish you a pleasant end to the year and a successful transition into the new quarter with Secured Finance. Stay tuned for further announcements and take advantage of the innovative features designed to enhance your DeFi experience!

Reference

• Fixed Income Apps (Itayose Page)
• Itayose — Fair Price Discovery (Official Docs)
• Auto-Rolling (Official Docs)
• Revolutionizing DeFi: Unfolding Secured Finance’s Unique Features (2) — Auto-Rolling Article
• Revolutionizing DeFi: Unfolding Secured Finance’s Unique Features (3) — Itayose Article

Secured Finance Official Links
Website | X | GitHub | Galxe | Link3 | Guild