Fixed-term value positions

Some participants in a market want exposure to a reference value for a fixed period — a merchant who must pay a supplier in ninety days, a provider hedging inventory — without holding the asset itself. Today that means a stablecoin (an issuer's liability) or a broker. On BATHRON it can be a bilateral contract: two parties, collateral in a covenant, and a payout selected at expiry by a signed reference price. BATHRON does not mint a stablecoin, and this pattern is not one.

The contract

A professional counterparty quotes the contract, prices the risk and commits collateral in M1. The other participant sees the quoted payoff and fees. At expiry, a price signature from the designated signer — verified by CSFS — selects which branch of the covenant pays out; CSV/CLTV bound the term and provide the fallback if no valid signature arrives.

  participant ───┐                        ┌─── professional counterparty
                 ▼                        ▼
           both commit collateral in a covenant, term T
                              │
                              ▼  at T
           CSFS checks the signed reference price
                              │
              price above K          price below K
                    │                      │
                    ▼                      ▼
             pays one side          pays the other

Balances on the M1 side can stay confidential; the reference price and the payout rule are explicit in the covenant.

What this is not

It is not a stablecoin: nobody issues a unit that claims par against anything, and the other participant is not invited to acquire network exposure. It is a bilateral position with real signer, counterparty, liquidity and model risk. Collateralisation and a fixed expiry limit some of those risks; they do not remove them. No implementation should be described as stable until its payout rules, signer failure modes and liquidation assumptions have been reviewed — see Status & claims.

Primitives: covenants · CSFS · CSV / CLTV · confidential internal balances

See also: Hedging on Bitcoin facts · Why not an exchange, a bridge, or a stablecoin