Pool Tokens

There are two type of tokens on Awake: AWE and WAKE.

WAKE represents the stake of LPs in the Senior Pool, whilst AWE represents the stake of Anchors in the individual Borrower Pools. Tranche tokens are deal-tranche-specific, fungible and non-transferable tokens. To provide further context: Awake Finance pool tokens follow the ERC-20 standard. They’re fungible by definition, but this assumes they belong to the same borrower pool, this is what we mean by deal-tranche-specific.

In this way, WAKE tokens are allocated automatically to the different borrower pools in accordance with the leverage ratios for each pool. AWE tokens always represent the junior tranche of each specific borrower pool.

WAKE and AWE ERC-20 tokens are always minted in exchange for USDC. WAKE tokens have an underlying price, determined by the NAV of the pool. This NAV is determined by the senior credit outstanding, reserve capital in the liquidity pool, and the number of WAKE tokens in existence. As time goes by and interest repayments come in, the WAKE token price will go up.

AWE tokens, on the other hand, are minted on a 1-1 basis. When the deal ends the investor will be able to withdraw the proportion of the repaid principal + interest of the junior tranche on a pro rata basis.