When investors redeem their tranche tokens, the amount of currency they receive depends on how much of the pool’s repayments have been collected and the investor’s share of the tranche. Qiro uses a transparent, formula-based approach to ensure fair and pro-rata redemption for all investors.
Below is an overview of the key variables used in the redemption price calculation.
Variable
Description
TrancheValue
Total expected value of the tranche (Principal + Expected Interest – Write-offs)
TotalRepaid
Total repayments collected so far for the tranche (Principal + Interest)
TokenReceived[User]
Number of tranche tokens minted to the user
TokenRedeemed[User]
Tokens already redeemed by the user
CurrencyRedeemed[User]
Currency already paid out to the user
UserShare
User’s share of the tranche = TokenReceived / TotalTokens
TokenAmount
Tokens the user wants to redeem (input)
Before processing a redemption, the system determines two things:
How many tokens the user is allowed to redeem, based on their ownership and repayments collected.
How much currency those tokens are worth.
The process follows three steps:
This ensures users cannot redeem more than their share of the tranche’s repaid amount.
This represents the user’s pro-rata share of all repayments collected so far.
The redemption price floats based on how much has been repaid.
The token price increases as more of the tranche is repaid.
Redemptions are fair and proportional, based on actual repayments—not NAV estimates.
Investors receive exactly their share of the collected repayments, even if they redeem at different times.
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MaxRedeemToken =
((TotalRepaid / TrancheValue) * TokenReceived[User])
– TokenRedeemed[User]MaxRedeemCurrency =
(TotalRepaid * Share[User])
– CurrencyRedeemed[User]TokenPrice = MaxRedeemCurrency / MaxRedeemToken