Token System

FYC and FFC — two claims on the same pool, structured to separate risk from reward.

Two Tokens, One Pool

Fleets uses two investor tokens — FYC and FFC — that both represent claims on the same shared pool. There are no separate capital silos or sub-vaults. The distinction is economic, not structural: each token defines a different priority in how yield is distributed and how losses are absorbed.

Token	Full Name	Role	Yield	Loss Priority
FYC	Fleets Yield Coin	Senior tranche	Capped — sliding cap tied to deployment	Last to absorb losses
FFC	Fleets FiLo Coin	Junior / first-loss tranche	Uncapped residual above FYC cap	First to absorb losses

How Token Prices Work

Both tokens use a share-price model. Users can mint new tokens at any point in time by depositing USDC, so supply grows dynamically as participation increases. As yield accumulates into each tranche’s value, the price per token also rises.

P_FYC = V_FYC / S_FYC
P_FFC = V_FFC / S_FFC

Variable	Description
P_FYC / P_FFC	Current redemption value per token in USD
V_FYC / V_FFC	Total economic value of the tranche at this moment
S_FYC / S_FFC	Current token supply

Example

Suppose at a given moment: V_FYC = $1,200,000 and S_FYC = 1,200,000 tokens → P_FYC = $1.0000

After 6 months of yield accretion: V_FYC = $1,248,000, supply is 1,200,000 → P_FYC = $1.0400

A new depositor putting in $50,000 receives: $50,000 / $1.0400 = 48,077 FYC tokens (new tokens are minted into the supply)

If that depositor redeems 12 months later at P_FYC = $1.1200: 48,077 × $1.1200 = $53,846 — a gain of $3,846.

Minting Tokens

When you deposit USDC, the protocol:

1. Checks the USDC oracle price (depeg protection — rejects if USDC trades below $0.995)
2. Swaps USDC for treasury-backed yield-bearing tokens via an on-chain DEX
3. Mints FYC or FFC tokens at the optimistic price (which includes accrued but not yet distributed loan yield)
4. Returns any yield-bearing token “dust” from swap slippage directly to the depositor

Tokens minted are calculated as:

Tokens minted = Deposit Amount / P_optimistic

Conservative vs Optimistic Price

The protocol maintains two price readings for each tranche:

Conservative Price

Based only on confirmed collected income. Used for redemptions and displayed in the UI at all times. More stable — excludes accrued but not yet received loan payments.

P_conservative = V_tranche / S_tranche

Optimistic Price

Includes accrued but not yet received loan interest since the last repayment. Used internally for minting (deposits) only. Prevents dilution of existing holders.

The optimistic price is calculated on-chain at the moment a user deposits.

The accrued yield in the optimistic price refers specifically to loan yield: interest that has been earned based on time elapsed since the last repayment but has not yet been received from borrowers. Yield from treasury-backed yield-bearing tokens is already reflected in the pool value continuously and does not need to be separately estimated.

FYC — The Senior Tranche

FYC is designed for depositors who prioritise predictable income and capital preservation.

Key characteristics:

• Yield is capped by a sliding rate that scales with the pool’s base yield and deployment level
• When the pool is fully deployed, FYC earns close to its full cap (typically 8–10%)
• When no loans are active, both FYC and FFC earn the same base APY from treasury-backed yield-bearing token returns
• FYC holders are the last to absorb credit losses — FFC and the Insurance Fund are exhausted first

FFC — The Junior Tranche

FFC is designed for depositors who want maximum yield in exchange for taking first-loss risk.

Key characteristics:

• Yield is uncapped — FFC receives everything left over after the FYC cap is filled
• At high deployment rates with high-APR loan books, FFC yields can significantly exceed FYC
• FFC holders absorb all credit losses first, before any loss touches the Insurance Fund or FYC
• The protocol enforces a hard coverage constraint: V_FFC / Active Loans ≥ 80% at all times

FFC is a first-loss instrument. In a default scenario, FFC holders’ token value may decline. Understand the default waterfall before depositing into FFC.

The FFC Coverage Constraint

This is the single most important safety rule in the protocol:

φ = V_FFC / Active Loans ≥ 0.80 (at all times)

The maximum the protocol can lend is:

L_max = V_FFC / 0.80

Example: If FFC tranche value =$800,000, the protocol can have at most$1,000,000 in active loans. This check runs before every new loan origination. If it would be breached, origination is blocked until FFC value grows or existing loans are repaid.

Continue to Capital Structure to understand how the pool’s 80/20 split works in practice.