## User Guide

#### Opening a FR long position

TODO: 
Circle back to the points above
Talk about price action and what it means
FR and SFR assets
open long -> secure a fixed rate
LONG if you LIKE the FIXED RATE 😃

When a user goes FR long, they buy locked assets at a discount. They buy 100 locked DAI for 95 DAI

**Buy locked assets at a discount, redeem full value at maturity:** Users can buy assets that are locked for a set duration at a discount. This discount is the fixed rate, as the user knows upfront how much they're paying today and how much they'll get at the end of the term. On the flip side, the AMM will use these user deposits to earn variable yield.

**Profit/loss example:** A user who pays 100 USDC today to buy 105 USDC that is locked for a year will have gotten a 5% fixed rate. If the underlying variable yield source performed for a 3% rate over that same timeframe, the market will earn 3 USDC from this user's deposit.

**Withdraw at any time:** Users can close their fixed rate positions before term maturity by selling their fixed rate assets back into the market. If they do so, their actual profit or loss will be determined by the current discount on the market, i.e., the current fixed rate.

#### Opening a Short position

TODO: Mention spread
FR is a sentiment indicator
MOAR SENTIMENT
if variable rate outperformed fixed, market sentiment was wrong
SHORT if you DISLIKE the FIXED RATE

**Pay a fixed price now, get variable rate returns**: Users can get variable rate exposure by paying a fixed price upfront. The AMM will then give them the variable returns from the market's locked assets, for a set duration.

In other words, the user is buying the variable yield from the market's assets. The price for this variable rate exposure is the same as the discount used for the fixed rates.

**Profit/loss example:** at a 5% fixed rate, a user who wants to buy the yield from 100 USDC for a 1-year term would have to pay 5 USDC. If the variable yield throughout the term turns out to be 8% (for example), the user will get 8 USDC back, minus their original 5 USDC, for a final 3 USDC profit. If the variable yield turns out to have been 3% instead, the user will only get back 3 USDC, minus their original 5 USDC, turning a 2 USDC loss.

**Withdraw at any time:** Users can close their variable rate positions before term maturity by selling the rights to the market's yield back into the market. If they do so, their actual profit or loss will be determined by the current fixed rate on the market, plus the variable performance throughout the term.