APT Issuance and Redemption

Issuing an APT involves depositing AX as collateral and minting the APT Pair. Anyone can send an APT Pair to the LSP Contract to redeem the collateralperpair.

Issuance

The Long and Short tokens collectively make up the APT Pair. On mint, APT pairs are priced as a unit for the collateralperpair. Collateralizing this amount of AX mints 1 Long APT and 1 Short APT into the minter's wallet.

For example, Alice wants to mint an Aaron Judge APT Pair. She sends 15,000AX to the Aaron Judge LSP contract and receives 1 Aaron Judge Long token and 1 Aaron Judge Short token.

Redemption

At expiration, the LSP will request a settlement price from UMA’s Optimistic Oracle (OO). The price returned by the OO will then be used to determine how much collateral each long and short token is worth.

The APT Price ID supplies the UMA Optimistic Oracle with a statistic called the Book Value. The APT Price ID uses price logic to identify the amount of collateral a Long or Short APT is worth on redemption. APT Pairs are always redeemable for the collateralperpair.

So for each APT Pair,

$$Long APT + Short APT = collateralperpair$$