Hourglass PT/CT Linear Discount Rate Oracle

[adam-hamden]

The Hourglass valuation oracle applies a straightforward linear discount model
to determine the present value of tokens that promise one unit of an underlying
asset at a future maturity time. This is written as:

$$PV = \frac{1}{1+rt}$$

While a PT or CT theoretically redeems for 1 underlying unit at maturity, it’s crucial to ensure that the system is fully solvent. If there is any shortfall in the underlying deposit, the redemption ratio should reflect that. If the underlying depositor contract currently holds  U  units of the underlying asset and there are  S  total claim tokens outstanding (PT + CT, since each represents a claim on 1 underlying unit at maturity), then the actual solvency ratio is:

$$\text{Solvency Ratio} = \frac{U}{S}$$

This suggests the following Present Value:

$$PV_{\text{adjusted}} = \frac{1}{1+rt}\times \frac{U}{S}$$

Both Principal Tokens (PTs) and Combined Tokens (CTs) receive a base
valuation equivalent to the discounted and solvency-adjusted unit of
underlying.

More info about Hourglass Principal Tokens (PTs) and
Combined Tokens (CTs) can be found here.