ACoconut - Lockup Contract

A financial instrument that allows Foundations to ensure token price stability and prevents investor sell off.

Use Case Description

The system allows makers to create new lockup issuance, and allows takers to engage the existing lockup issuance.

Actors

  • Maker, who is the asset seller of the lockup. Usually the Foundation who wants to stabilize the market price of the token asset;

  • Taker, who is the asset purchaser of the lockup. Usually the token investor;

  • Timer Oracle, who is an external timer service provider that provides timing triggers to NUTS technology platform.

Precondition

  • Financial Service Providers have created the lockup instruments using the NUTS protocol;

Process Flow

The process flow of the Lockup contract is shown below.

Main Process Flow

  • Maker creates new issuance of lockup instrument;

  • Maker deposits the bonus token to the lockup issuance;

  • Taker engages the lockup issuance;

  • Taker deposits the principal token to the lockup issuance;

  • When the lockup ends, the taker can retrieve both the principals and the bonus token.

Alternative Process Flow

  • If maker does not deposit the bonus token in time, the issuance becomes unfunded;

  • If taker does not deposit the principal token in time, the issuance becomes delinquent;

  • If there is no engagement in time, the issuance completes with no engagement.

Issuance States

Below are the possible states of a lockup contract.

  • Initiated: The lockup issuance is created;

  • Engageable: The maker deposits the bonus token;

  • Active: The taker engages the lockup issuance;

  • Complete Engaged: The lockup period ends with principal token deposited in time;

  • Unfunded: The maker fails to deposit the bonus token in time;

  • Complete not Engaged: No taker engages in time;

  • Delinquent: The taker fails to deposit principal token in time.