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Animation showing CBT holder placing limit order to exit position early

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Overview

CBT holders can exit their lending position before maturity without waiting for redemption. By selling CBT back to the order book, you convert your position to stablecoins immediately or at your desired price.
Key Advantage: Unlike regular borrowing, CBT holders don’t need additional collateral to exit. The CBT itself represents your claim, selling it is simply transferring that claim to someone else.

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Why Early Exit?

Common reasons to exit before maturity:
  • Need liquidity: Unexpected expense or opportunity
  • Rate changes: Market rates increased, want to re-lend at higher rate
  • Risk management: Reducing exposure to protocol
  • Portfolio rebalancing: Adjusting allocations

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Exit Options

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Limit Order Exit

Set your desired exit price and wait for a match.
1

Access Position

Go to your CBT position in the dashboard
2

Select 'Sell CBT'

Choose the limit order option
3

Set Your Price

Enter the minimum price you’ll accept per CBTExample: CBT fair value is 0.96,yousetlimitat0.96, you set limit at 0.955 (slightly below)
4

Submit Order

Your sell order enters the order book
5

Wait for Match

When a buyer matches your price, you receive stablecoins
Step-by-step limit order exit flow
Pros:
  • Get your desired price
  • No slippage
  • Order can be modified or cancelled
Cons:
  • May take time to fill
  • May not fill if price moves away
  • Requires monitoring

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Market Order Exit

Exit instantly at the current market price.
1

Access Position

Go to your CBT position in the dashboard
2

Select 'Sell CBT'

Choose the market order option
3

Review Price

See the current best bid price you’ll receive
4

Confirm

Execute the trade instantly
Market order instant exit demonstration
Pros:
  • Instant execution
  • Guaranteed fill
  • No monitoring needed
Cons:
  • May get worse price in thin markets
  • Slippage on large orders
  • Can’t cancel once submitted

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No Collateral Required

This is a critical difference from regular borrowing!
When you sell CBT to exit early:
ActionCollateral Required?
New borrow order✅ Yes (110-150% depending on asset)
Selling CBT to exit❌ No
Why no collateral? When you sell CBT, you’re not borrowing, you’re selling an existing asset. The CBT buyer takes on your position and will redeem at maturity. You simply receive the current market value.

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Pricing Your Exit

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Understanding CBT Value

CBT price is determined by: 
Theoretical Price = Face Value / (1 + Rate × Time Remaining)
Example: 8% APY CBT with 90 days remaining 
Price = $1 / (1 + 0.08 × 90/365) = $1 / 1.0197 = $0.9807

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Market vs Theoretical

Actual market prices may differ:
FactorEffect on Price
High demand to exitPrice below theoretical
High demand to buyPrice above theoretical
Low liquidityWider bid-ask spread
Rate expectations upPrice down
Rate expectations downPrice up

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Checking Current Price

Before exiting, review:
  • Best bid: Highest price someone will pay now
  • Theoretical value: Fair value based on rate and time
  • Spread: Difference between bid and ask
  • Depth: Volume available at each price

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Exit Strategies

Situation: Need cash immediatelyStrategy: Market orderTrade-off: Accept current market price for instant liquidity
Position: 10,000 CBT @ $0.975 theoretical
Market bid: $0.970
Receive: $9,700 instantly
Cost: $50 (0.5% below theoretical)

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Impact on Order Book

When CBT holders sell to exit, it benefits the ecosystem:

Adds Liquidity

More sell orders = deeper order book for new lenders

Price Discovery

Trading activity helps establish fair market rates
The buyer of your CBT is essentially a new lender taking over your position. This recycling of positions keeps the market liquid.

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Tax Considerations

Early exit may have different tax implications than holding to maturity. Consult a tax professional for your jurisdiction.
Potential considerations:
  • Realized gain/loss: Selling crystallizes your position
  • Short vs long-term: Depends on holding period
  • Interest vs capital gain: Treatment may vary

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Comparison: Exit Methods

MethodSpeedPrice ControlCollateralBest For
Limit sellVariableHighNonePatient exits
Market sellInstantNoneNoneUrgent exits
Hold to maturityFixed dateGuaranteed $1NoneNo exit needed

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FAQs

Yes. CBT is divisible. Sell any amount up to your full balance.
If limit order doesn’t fill, you can:
  • Lower your price
  • Wait longer
  • Cancel and hold to maturity
  • Try market order
Standard protocol fees apply (0.1% of transaction). No penalty for early exit.
Yes. Sell CBT, receive stablecoins, place new lend order at desired rate. Common strategy when rates rise.
Auto-rollover is tied to CBT ownership. If you sell all your CBT, there’s nothing to roll over. The buyer’s settings apply to their new position.

Manage Your Positions

Access the dashboard to view and exit positions