GROW Token (ERC-20)
What is GROW Token?
The Grow Token is a liquid, yield-bearing representation of the Senior Tranche within each loan bundle. It is designed for passive investors seeking predictable, fixed returns and prioritizes principal protection through the protocol’s repayment waterfall.
Key features:
Minted when USDC is deposited into the senior pool
Burned upon withdrawal or redemption
Fixed interest rate, set by the lending partner at bundle creation
Partial redemptions allowed at any time, subject to liquidity
Auto-redeemed at loan maturity with no fees
Early redemption allowed with a 1% protocol fee, subject to liquidity and a FIFO withdrawal queue
How Grow Token Value Increases
Grow Tokens do not receive direct interest payouts. Instead, their value grows through an increase in their Net Asset Value (NAV) over time. As the lending partner deposits loan repayments into the protocol, the smart contract allocates these funds first to cover:
Senior Principal – ensuring full capital protection
Senior Interest – added to the value of the senior pool
This increase is reflected in the internal accounting of the protocol. As repayments accumulate, the NAV of the senior pool rises. Because Grow Tokens are redeemable based on this NAV, their redemption value increases over time.
Net Asset Value (NAV) Calculation
The NAV represents the total value of all active senior positions in a specific loan bundle, including accrued but unpaid interest. It is calculated as:
NAV = (Total Repaid to Senior Pool – Remaining Senior Principal Outstanding) / Total Grow Tokens in Circulation
The NAV per Grow Token increases as more senior interest is repaid. Upon redemption, investors receive USDC proportional to the NAV at that point in time.
This structure allows Grow Token holders to benefit from a predictable and transparent yield mechanism without the need for manual interest claims. Their earnings are realized upon redemption—either at maturity (without fee) or through early withdrawal (with fee and queue constraints).
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