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Last updated: Aug 20, 2023
Tempus is a multi-chain fixed income protocol that integrates with lending protocols, staking protocols, and yield aggregators, and lets users fix or speculate on the yield generated by them. Tempus currently operates on Ethereum and Fantom.
The protocol is governed by a decentralized community of Tempus native token holders (TEMP), who can propose and vote on various changes to the protocol.
Tempus enables users to deposit yield-bearing tokens into pools with a fixed maturity date, and then either earn rewards at a fixed rate or speculate on the future yield for profit.
Each Tempus pool has a different maturity time depending on the underlying protocol. However, the current pools on Tempus offer short-term maturity contracts, while longer-term pools are planned to be introduced as the protocol grows. At the moment, Tempus supports Lido and Yearn.
Tempus pools support two types of deposits: yield bearing token deposits and base token deposits.
Once a user deposits their yield bearing tokens into a pool, the protocol locks them in the Tempus smart contract and then mints two separate tokens in equal proportion in return: Capital token and Yield token. A base token is a token that underlies the yield bearing token. If a user deposits a base token into a pool, the protocol transforms it into a yield bearing token. For instance, ETH is converted into stETH via Lido.
Capital tokens are equal to the amount of assets deposited into the pool. The number of capital tokens held in your portfolio represents the total number of yield bearing tokens you will receive once the contract matures. Users can redeem their Capital tokens for the underlying assets at a 1:1 ratio upon maturity of the pool. On the other hand, Yield tokens accrue variable yield on the underlying asset for the lifespan of the pool.
Once a yield bearing token is divided into two separate tokens, users can trade them against each other using the Tempus AMM.
Users may choose to swap Yield tokens for Capital tokens and lock in a fixed yield in advance to be collected at maturity. This strategy mitigates the risk of volatile markets where variable yields may decrease over time. By choosing the strategy of swapping Capital tokens for Yield tokens, users can benefit from variable yield. So when the interest rates increase, it is possible to earn more than from the APR of the underlying yield-bearing token. This method can be an option for volatile market phases with rising variable yields.
Another option to earn a profit is to provide liquidity. You can deposit the underlying backing token or yield bearing token to earn yield from the underlying protocol as well as rewards from swap fees from all trades on Tempus AMM. The reward is in proportion to the share of liquidity provided to the pool.
Before proceeding with the Tempus app, it is first required to connect a wallet. Tempus supports Metamask and Wallet Connect.
As the first step, the user needs to select the pool where the assets will be deposited. All the pools are displayed on the front page of the Tempus app and include information such as the source of yield, maturity date, fixed APR, and TVL. You can also check your balance in the pool and the value of your tokens that are available in your connected wallet.
To fix your yield, click on the ‘Manage’ button to navigate to the ‘Deposit’ page. Select the token (yield bearing token or base token) available in your wallet. Enter the amount of the tokens you would like to deposit to fix your yield and click on the ‘Fixed Yield’ button. Approve and Execute the transaction. To become a liquidity provider and earn on top of the existing variable rates offered by the underlying protocols, select the ‘Variable Yield’ button, approve and execute the transaction. You will receive an equivalent number of Capital and Yield tokens that can now be traded on Tempus AMM based on your investment strategies for the token in the pool.
After depositing assets, users can view their current position on the right side of the dashboard. This screen shows the number of Capital, Yield, and LP tokens available in the user’s balance.
Users can withdraw their assets before maturity without penalties for early redemption. If they choose to do so, it is necessary to click the ‘Withdraw’ button, enter the number of Capitals, Yields, and LP Tokens to be removed and confirm the transaction. You must however remember that to withdraw your tokens before maturity, you will need to burn an equal number of Capital and Yield tokens to get the same number of yield bearing tokens in your wallet.
The Tempus protocol is governed by TEMP token holders. The TEMP token allows the community to propose and vote on key changes in relation to the Tempus protocol.
TEMP is the Tempus governance token. The total supply of the token is 1 billion TEMP with ~70M TEMP being minted in a fair launch auction in November 2021. The remaining 930M TEMP will be unlocked over the course of three years. The initial three-year allocation of the 1 billion TEMP is as follows: 7% - fair launch, 20% - treasury (unallocated), 25% - treasury (liquidity incentives), 26% - Tempus Labs team, 22% - investors and advisors. After a four-year period, annual token inflation of 2% can also be triggered by governance.
Tempus is a DAO governed by TEMP tokenholders, who can propose changes and improvements to the protocol. TEMP holders can also enable fees on deposits, withdrawals, and swaps on Tempus.
Tempus is running two bug bounty programs with ImmuneFi (up to $1,000,000 reward) and Hats (up to 1M TEMP reward). Tempus has also partnered with Sherlock for Smart Contract Exploit Protection with up to $10,000,000 of protocol-level exploit coverage on the Ethereum network.
David Garai is the Founder of Tempus, who is now responsible for providing strategic, financial, and operational oversight. David previously worked as a structured finance lawyer for two law firms in London and Tokyo. Djordje Mijovic is the Co-founder of Tempus and is responsible for technological oversight. Before Tempus, he worked as a core Solidity compiler developer at the Ethereum Foundation.
At this point, Tempus has managed to raise over $30 million worth of funding from investors such as Lemniscap, Jump Capital, Distributed Global, Koji Capital, GSR, Wintermute, LAUNCHub, Tomahawk, and others.
According to the Tempus roadmap, it is further planned to get Tempus listed on centralized exchanges, launch liquidity provider vaults, launch sustainable long-term liquidity mining programs for Tempus users and LPs, launch Tempus finance on other chains and deploy more pools. Tempus is also currently undergoing a complete restructuring and rebranding with other products in the pipeline.