Users should be aware of the fact the yield from deposited collateral all goes to the Coupon treasury. The coupon buyers (borrowers) must leave an amount of non-yielding collateral, which will be reflected in the amount they would be willing to bid on coupons. Coupon price should show the market's view of the fixed lending rate, minus the opportunity cost of the collateral value yield over that epoch.
Description
Users should be aware of the fact the yield from deposited collateral all goes to the Coupon treasury. The coupon buyers (borrowers) must leave an amount of non-yielding collateral, which will be reflected in the amount they would be willing to bid on coupons. Coupon price should show the market's view of the fixed lending rate, minus the opportunity cost of the collateral value yield over that epoch.