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Market Initialization

Overview​

Each market is uniquely identified by a Market Id, which corresponds to the market's Loan Token address. A market's Loan Token is the ERC4626 compliant variable rate yield-bearing token representing the market's deposits on the reference Morpho money market.

Markets on Tenor can support multi-collateral markets. For multi-collateral markets the market creator specifies the Loan Token's reference market on Morpho.

Market Initialization​

function initialize(
    bytes32 loanMarketId,
    bytes32[] memory collateralMarketIds,
    uint8 maxTick,
    uint8 bpsPerTick,
    IPoolManager poolManager
) external nonReentrant returns (ILoanToken loanToken)

Parameters​

ParameterDescription
loanMarketIdMorpho market identifier for loan asset
collateralMarketIdsArray of accepted collateral market IDs
bpsPerTickBasis points per tick for rate granularity
poolManagerPool Manager contract address

Initialization Process​

  • Validates caller permissions. Only the initializer can create new markets
  • Checks tick configuration (must be above 0)
  • Validates market parameters. In the context of multi collateral markets all loan assets must be identical. No two Morpho reference market can have the same collateral asset.
  • For each collateral and loan asset pair, the pair's LLTV and oracle is inherited from the Morpho market.

Loan Token​

During the market creation process, the market's Loan Token is created. The initializer pays a small amount to mint a small amount of Loan Tokens, these Loan Tokens are then burned.

Maturity Initialization​

Once a market is created, the initializer can initialize maturities. During this process the Loan Token creates a Fixed Token with the maturity date specified by the initializer. The initialize maturity call also creates a pool on the Pool Manager with the Loan Token, Fixed Token. The pool's parameters such as Bps per tick and max tick are taken from the Market.