Decoding Hourglass and Time-Bound Token TBT: What new possibilities will they bring to the DeFi sector?

Time-Bound Token (TBT) is a new asset class that may be applicable to the entire Web3 ecosystem, and Hourglass has changed the utility dimension of time-locked tokens across DeFi protocols through this mechanism. Cryptocurrency researcher DefiNapkin has analyzed and interpreted the concept, advantages, and how Hourglass will lead the development of this technology in an article.

Time-bound Token (TBT) represents a token collateralized for a specific time period in a protocol. For example, pledging frxETH for 3 months in Frax Finance results in a receipt for a TBT with a validity of 3 months, and also earns a staking reward. TBT is actually a semi-fungible ERC-1155 token, with characteristics of both ERC-20 and ERC-721. Additionally, TBT operates on a non-custodial basis, with ownership represented by TBT being securely stored in the “Hourglass Custodial Smart Contract” for the entire lock-up period, and can be redeemed by users for corresponding assets after the expiration date.

Compared to traditional DeFi staking mechanisms, TBT has the following advantages: 1) a liquid DEX for collecting fees in new product features; 2) users can use additional rewards to exchange for TBT; 3) users have greater usability and flexibility for collateralized assets; 4) users can perform risk management, allowing them to sell collateralized positions; 5) TBT provides a more stable TVL. TBT sounds similar to LSD, as both tools aim to provide additional utility for locked-up assets, increasing the liquidity of collateralized assets in DeFi protocols. The only difference is that TBT has a time factor, allowing users to trade TBT on the market before the end of the lock-up period.


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