Hourglass Starts Unique Marketplace to Trade Locked Up DeFi Assets

Hourglass, a crypto startup, has introduced the world’s inaugural marketplace for trading Time-Bound Tokens (TBTs). This groundbreaking concept involves tokenizing a user’s staked assets within a decentralized finance (DeFi) protocol, with the token’s value determined by its specified lock-up duration.

Hourglass Starts Unique Marketplace to Trade Locked Up DeFi Assets

Hourglass, a crypto startup, has launched the world’s first-ever marketplace for Time-Bound Tokens (TBTs), which tokenizes a user’s staked assets within a decentralized finance (DeFi) protocol based on the lock-up period.

The aim of the marketplace is to enable users to trade their place in line for their locked-up assets by transferring ownership of the asset to another buyer. According to Charlie Pyle, Hourglass’ founder, “You can basically take a time-bound token and then transfer ownership of it easily.”

The marketplace’s launch coincides with Lido’s Version 2 deployment, during which Hourglass will tokenize Lido’s withdrawal queue. This process will prevent the withdrawal queue from becoming clogged for an extended period, allowing users to “trade their place in line” for withdrawal of their staked ether and gain liquidity in the interim.

As per DefiLlama, Lido is the largest liquid staking platform in the DeFi space, with over $12 billion in total value locked (TVL) across the Ethereum ecosystem.

How It Works

To put it simply, the marketplace introduced by Hourglass allows users to access liquidity for their locked-up assets by selling the rights to the duration of time in a secondary market. In a press release, Hourglass stated that Time-Bound Tokens (TBTs) are a growing category of tokens that represent assets staked in DeFi protocols for a specific period.

According to the statement, Hourglass will facilitate various transactions, including the trading of locked frxETH (Frax ether token) and early exits from Lido’s withdrawal queue. As an example, if a user stakes 10 Frax ether into the Frax protocol for a month, they will receive 10 TBTs, along with any staking rewards, which can be traded on the marketplace.

Similar to other secondary markets, the platform offers discounts on TBTs based on the lock-up duration of the assets. For instance, a trader might bid for a 3% discount on ether (ETH) with a 10-month lock-up period. The discount may vary depending on the length of the asset’s lock-up, explained Pyle.

The TBTs will be issued by “Hourglass custodian smart contracts” and are semi-fungible tokens following the ERC1155 standard, clarified Pyle. Although the smart contracts are called custodian, the TBTs are non-custodial, meaning that the founding team has no control over the deposited assets.

The custodian smart contracts hold the locked assets, which TBTs represent ownership of, and users can redeem their matured TBTs for the underlying assets at the end of the lock-up period.

Currently, Hourglass does not charge any fees for trading on the platform. In a seed funding round, Hourglass raised $4.2 million, with Electric Capital leading the investment and participation from investors such as Coinbase Ventures, Circle Ventures, Tribe Capital, hack.vc, and other angel investors.

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