> ## Documentation Index
> Fetch the complete documentation index at: https://docs-staging.centuari.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Centuari Bond Token (CBT)

> Tokenized lending positions that behave like Zero Coupon Bonds

<Frame>
  <img src="https://mintlify.s3.us-west-1.amazonaws.com/centuari/assets/gifs/cbt-overview.gif" alt="Animation showing CBT price converging from discount to $1 at maturity" />
</Frame>

## What is CBT?

Centuari Bond Token (CBT) is an ERC-20 token that represents your lending position in the protocol. When you lend assets on Centuari, you receive CBT tokens instead of a simple deposit receipt.

<Info>
  **Key Concept**: CBT behaves like a Zero Coupon Bond (ZCB). You receive more CBT than your deposit (at a discount price per token), and each CBT is worth exactly \$1 at maturity. The extra CBT represents your fixed interest.
</Info>

## How CBT Works

### More CBT at a Discount Price

When you lend, you receive more CBT than your deposit amount. Each CBT is priced at a discount and will be worth exactly \$1 at maturity:

| You Lend    | Rate | Maturity   | CBT Received | Value at Day-0 | Value at Maturity |
| ----------- | ---- | ---------- | ------------ | -------------- | ----------------- |
| 10,000 USDC | 10%  | 1 year     | 11,000 CBT   | \$10,000       | \$11,000          |
| 10,000 USDC | 10%  | 6 months   | 10,500 CBT   | \$10,000       | \$10,500          |
| 10,000 USDC | 10%  | \~3 months | 10,250 CBT   | \$10,000       | \$10,250          |

### Price Convergence

CBT price moves toward \$1 as maturity approaches:

```
Price
  │
$1├─────────────────────────────●  Maturity
  │                          ●
  │                       ●
  │                    ●
  │                 ●
  │              ●
  │           ●
$0.93├──●
  │
  └──────────────────────────────► Time
    T0                          T(maturity)
```

<Tabs>
  <Tab title="Day 1">
    * **Lend**: 10,000 USDC at 10% APY for 1 year
    * **Receive**: 11,000 CBT
    * **CBT Price**: \~\$0.909 (10,000 / 11,000)
    * **Position Value**: \$10,000
  </Tab>

  <Tab title="Day 180">
    * **CBT Price**: \~\$0.952
    * **Position Value**: \~\$10,476
    * **Unrealized gain**: \~\$476 (half of expected return)
  </Tab>

  <Tab title="Maturity">
    * **CBT Price**: \$1.00
    * **Position Value**: 11,000 CBT → \$11,000 USDC
    * **Total Return**: $1,000 (10% yield on original $10,000)
  </Tab>
</Tabs>

## Why Tokenize Positions?

CBT makes your lending position **composable**, you can do things with it that are impossible with traditional lending:

<CardGroup cols={2}>
  <Card title="Trade It" icon="arrow-right-arrow-left">
    Sell your position on secondary markets for early exit without protocol withdrawal
  </Card>

  <Card title="Collateralize It" icon="shield">
    Use CBT as collateral in other DeFi protocols (Aave, etc.)
  </Card>

  <Card title="Index It" icon="layer-group">
    Include CBT in yield indices and structured products
  </Card>

  <Card title="Transfer It" icon="paper-plane">
    Send your position to another wallet without closing it
  </Card>
</CardGroup>

## CBT Mechanics

### Minting

CBT is minted when a lend order is matched:

1. Lender places order (or uses Easy Mode)
2. Order matches with borrower
3. Lender's USDC transferred to protocol
4. CBT minted to lender's wallet

**Formula**:

```
CBT Amount = Principal × (1 + Rate × Time)
```

For example: 10,000 USDC at 10% for 1 year = 10,000 × (1 + 0.10 × 1) = 11,000 CBT

### Redemption

At maturity, CBT can be redeemed for \$1 each:

1. Maturity date arrives
2. Lender calls `redeem()` (or auto-rollover triggers)
3. CBT burned
4. Principal + interest sent to lender

### Transfer

CBT is a standard ERC-20 token:

* Transfer to any address
* Trade on DEXs
* Deposit to other protocols
* No restrictions on movement

## Early Exit via CBT

<Warning>
  CBT holders can exit before maturity by selling their position, no need to wait, no protocol withdrawal required.
</Warning>

### How It Works

Instead of redeeming at maturity, CBT holders can sell back to the order book:

<Steps>
  <Step title="Choose Exit Type">
    * **Limit Order**: Set your price, wait for match
    * **Market Order**: Instant exit at current rate
  </Step>

  <Step title="No Collateral Needed">
    Unlike regular borrowers, CBT sellers don't need collateral, the CBT itself represents your claim
  </Step>

  <Step title="Order Book Matches">
    Your sell order matches with a new lender's buy order
  </Step>

  <Step title="Receive Proceeds">
    Get stablecoins based on current CBT price
  </Step>
</Steps>

<Card title="Early Exit Details" icon="door-open" href="./cbt-early-exit">
  Learn more about limit and market exit options
</Card>

## CBT Pricing

### Theoretical Price

The fair value of CBT at any time is:

```
CBT Price = 1 / (1 + Rate × Time Remaining)
```

### Market Price

Actual trading price may differ due to:

* **Supply/demand**: More sellers = lower price
* **Rate expectations**: If market rates change, CBT prices adjust
* **Liquidity**: Thin markets may have wider spreads

<Info>
  **Arbitrage**: If CBT trades below fair value, arbitrageurs buy it and hold to maturity for risk-free profit. This keeps prices efficient.
</Info>

## CBT Markets

Each CBT is specific to its underlying asset and maturity:

| CBT Token           | Underlying | Maturity     | Example                    |
| ------------------- | ---------- | ------------ | -------------------------- |
| CBT-USDC-2025-06-01 | USDC       | June 1, 2025 | USDC maturing June 1, 2025 |
| CBT-USDC-2025-09-01 | USDC       | Sept 1, 2025 | USDC maturing Sept 1, 2025 |
| CBT-USDT-2025-06-01 | USDT       | June 1, 2025 | USDT maturing June 1, 2025 |

### Market Depth

* Nearest maturity dates typically have the deepest liquidity
* Easy Mode defaults to the next available maturity for better liquidity

## Technical Details

### Token Standard

* **Standard**: ERC-20
* **Network**: Arbitrum
* **Decimals**: 18

### Contract Functions

```solidity theme={null}
interface ICBT {
    // Standard ERC-20
    function transfer(address to, uint256 amount) external returns (bool);
    function approve(address spender, uint256 amount) external returns (bool);
    function balanceOf(address account) external view returns (uint256);

    // CBT-specific
    function underlying() external view returns (address);
    function maturity() external view returns (uint256);
    function redeem(uint256 amount) external returns (uint256);
    function redeemTo(address recipient, uint256 amount) external returns (uint256);
}
```

### Key Properties

| Property     | Value                                    |
| ------------ | ---------------------------------------- |
| `underlying` | Address of underlying asset (USDC, etc.) |
| `maturity`   | Unix timestamp of maturity date          |
| `faceValue`  | Always 1.0 (with decimals)               |

## Use Cases

<AccordionGroup>
  <Accordion title="Simple Hold to Maturity" icon="hourglass">
    1. Lend USDC, receive CBT
    2. Hold until maturity
    3. Redeem for principal + interest

    **Best for**: Set-and-forget fixed-rate exposure
  </Accordion>

  <Accordion title="Early Exit via Sale" icon="right-from-bracket">
    1. Lend USDC, receive CBT
    2. Circumstances change, need liquidity
    3. Sell CBT on order book
    4. Receive current market value

    **Best for**: Users who may need flexibility
  </Accordion>

  <Accordion title="CBT as Collateral" icon="lock">
    1. Lend USDC, receive CBT
    2. Deposit CBT as collateral in Aave
    3. Borrow against your lending position
    4. At maturity, repay Aave loan and redeem CBT

    **Best for**: Capital efficiency, leveraged strategies
  </Accordion>

  <Accordion title="Yield Arbitrage" icon="chart-line">
    1. Spot CBT trading below fair value
    2. Buy CBT on secondary market
    3. Hold to maturity
    4. Redeem at \$1 for risk-free profit

    **Best for**: Sophisticated traders, market makers
  </Accordion>
</AccordionGroup>

## FAQs

<AccordionGroup>
  <Accordion title="Is CBT always worth exactly $1 at maturity?">
    Yes. At maturity, each CBT can be redeemed for exactly \$1 worth of the underlying asset. This is guaranteed by the protocol.
  </Accordion>

  <Accordion title="What if I lose my CBT?">
    CBT is a bearer instrument. Whoever holds the token can redeem it at maturity. If you lose access to your wallet, you lose access to your position.
  </Accordion>

  <Accordion title="Can CBT price go above $1 before maturity?">
    In theory, no, why pay more than $1 for something worth $1 at maturity? In practice, brief inefficiencies may occur but are quickly arbitraged away.
  </Accordion>

  <Accordion title="How is CBT different from Pendle PT?">
    Similar concept (tokenized yield), different mechanics. CBT is specific to Centuari's fixed-rate order book system and integrates with auto rollover/refinance features.
  </Accordion>
</AccordionGroup>

<Card title="Start Earning CBT" icon="coins" href="/user-guides/lenders/getting-started">
  Begin your fixed-rate lending journey
</Card>