A tokenised repurchase agreement (repo) is a two-part transaction where one party sells a tokenised bond to another and agrees to repurchase it at a later date, typically at a slightly higher price. It is one of the most common instruments in fixed-income markets. KeyStone handles repo as two linked DvP settlements - an opening leg and a closing leg. What happens between legs is not KeyStone’s concern.Documentation Index
Fetch the complete documentation index at: https://docs.keystoneos.xyz/llms.txt
Use this file to discover all available pages before exploring further.
KeyStone’s role in repo
KeyStone settles both legs of a repo. The period between legs - collateral management, yield strategies, rehypothecation - is the counterparties’ business.| Concern | Who handles it |
|---|---|
| Settlement of opening leg | KeyStone (atomic DvP) |
| Settlement of closing leg | KeyStone (atomic DvP) |
| What lender does with bond during repo | Lender’s choice (Aave Horizon, hold in custody, etc.) |
| Collateral management | Bilateral agreement between counterparties |
| Maturity trigger | KeyStone (scheduling) |
| Default enforcement | Legal agreement between counterparties |
What KeyStone does NOT do for repo
- Lock collateral for the repo duration (that is lending - Aave Horizon does this)
- Monitor collateral ratios (that is lending)
- Handle margin calls (that is lending)
- Enforce repayment (that is between the counterparties)
- Liquidate on default (that is between the counterparties)
Lifecycle
How Aave Horizon composes
Aave Horizon is a pooled lending protocol for institutional RWA collateral. KeyStone is bilateral atomic settlement infrastructure. They are fundamentally different products that compose naturally:- KeyStone settles both legs of the repo (opening DvP and closing DvP)
- Between legs, the lender optionally deposits the received bond into Aave Horizon to earn yield during the holding period
- Collateral management (margin monitoring, haircuts, liquidation) is NOT KeyStone’s concern
- Default enforcement follows the same model as TradFi repo: bilateral legal agreements govern
Settlement categories
Settlements carry an optionalsettlement_category field:
| Category | Description |
|---|---|
repo_open | The opening leg. Created by the platform with a maturity_at timestamp. |
repo_close | The closing leg. Auto-created by KeyStone at maturity with reversed legs. |
null | A standard DvP settlement (default). |
Maturity handling
The opening settlement includes amaturity_at timestamp. When the opening settlement finalizes and maturity arrives, KeyStone automatically creates the closing settlement.
Manual trigger: Administrators can trigger maturity early via the admin API:
Leg reversal at closing
When the closing settlement is created, the legs from the opening settlement are reversed:| Opening leg | Closing leg |
|---|---|
| Seller delivers bond | Buyer delivers bond (return) |
| Buyer delivers USDC | Seller delivers USDC + interest (return) |
Default scenario
If the borrower does not show up for the closing leg:- KeyStone records the failed settlement
- The lender already has the bond (from the opening DvP)
- Legal recourse governs (bilateral agreement between institutions)
- Legal agreements between the counterparties handle defaults
A repo is not a single settlement with two phases. It is two independent settlements linked by a parent-child relationship. Each settlement has its own events, its own escrow, and its own compliance checks.