Borrowing
Redemptions
Anyone can turn PLMB into a dollar's worth of JitoSOL. Redemptions take the lowest-rate debt first, and they are what holds PLMB at its floor.
A redemption burns PLMB and pays out JitoSOL worth one dollar per PLMB at the program's price, less a fee. You don't need a trove to redeem; any wallet with PLMB can.
Where the JitoSOL comes from
The JitoSOL comes out of troves, starting at the lowest rate that has debt.
- Within that rate, every trove gives up debt in proportion to what it owes, and JitoSOL in the same proportion.
- One transaction redeems from one rate. A larger redemption continues at the next rate in another transaction, and the app caps each one at what the lowest rate holds.
- A redeemed borrower loses debt and an equal value of JitoSOL, less the fee. The fee stays in their trove, so on paper they come out slightly ahead.
The fee
The fee starts at 0.5%, rises after each redemption, and decays back:
- Each redemption adds half of the share of the branch's debt it redeemed. Redeeming 2% of all debt adds 1 point; redeeming 5% adds 2.5 points.
- The added part halves for every whole hour since the last redemption.
- The fee never goes above 10%.
A rising fee makes a rush of redemptions progressively more expensive, so a short dip in PLMB's price can't strip the lowest rates bare in minutes.
Why redemptions hold the peg
If PLMB trades at $0.98, anyone can buy it there and redeem it for $1 of JitoSOL, less 0.5%: about $0.995. That buying lifts the price, and every redeemed PLMB is burned, which shrinks supply. The gap closes when PLMB reaches $1 minus the fee, which is why the floor sits at $0.995 or higher.
Nothing works the same way above $1. If PLMB trades at $1.02, borrowers can mint more and sell it, but that takes a decision and collateral. The ceiling is soft.
Limits
- A redemption can't touch a trove that is below 150%. If the lowest rate holds one, it has to be liquidated first; until then redemptions at that rate fail.
- A redemption needs a fresh price, like every action that values collateral.
- When you sign, you set the least JitoSOL you will accept and the highest fee you will pay. If the price or the fee moves past them before the transaction runs, it fails and nothing changes. The app allows 1% of movement in the JitoSOL amount.
Redeeming in the app
- Open Redeem in the app.
- Enter the PLMB to redeem. The app shows the fee now, the JitoSOL before and after the fee, and the troves it will reduce.
- Choose Redeem PLMB and approve the transaction in your wallet.
The board shows the cut before you sign: the part of the leftmost string the redemption will take turns into a dashed vermilion line.
# Redemptions Anyone can turn PLMB into a dollar's worth of JitoSOL. Redemptions take the lowest-rate debt first, and they are what holds PLMB at its floor. A redemption burns PLMB and pays out JitoSOL worth one dollar per PLMB at the program's price, less a fee. You don't need a trove to redeem; any wallet with PLMB can. ## Where the JitoSOL comes from The JitoSOL comes out of troves, starting at the lowest rate that has debt. - Within that rate, every trove gives up debt in proportion to what it owes, and JitoSOL in the same proportion. - One transaction redeems from one rate. A larger redemption continues at the next rate in another transaction, and the app caps each one at what the lowest rate holds. - A redeemed borrower loses debt and an equal value of JitoSOL, less the fee. The fee stays in their trove, so on paper they come out slightly ahead. :::figure redemption | A redemption of 850,000 PLMB empties the 1%, 2% and 3% rates and takes part of the 4% rate. Each trove at 4% gives up the same share of its debt. > [!WARNING] > Being redeemed is not a loss, but it is not your choice either. Your debt and your JitoSOL both shrink, and if your whole trove is redeemed you are left holding JitoSOL instead of a loan. If that matters to you, choose a rate with more debt below it. ## The fee The fee starts at **0.5%**, rises after each redemption, and decays back: - Each redemption adds half of the share of the branch's debt it redeemed. Redeeming 2% of all debt adds 1 point; redeeming 5% adds 2.5 points. - The added part halves for every whole hour since the last redemption. - The fee never goes above **10%**. :::figure fee | After a redemption of 5% of the branch's debt the next one costs 3%. An hour later it costs 1.75%, and within a few hours it is back near 0.5%. A rising fee makes a rush of redemptions progressively more expensive, so a short dip in PLMB's price can't strip the lowest rates bare in minutes. ## Why redemptions hold the peg If PLMB trades at $0.98, anyone can buy it there and redeem it for $1 of JitoSOL, less 0.5%: about $0.995. That buying lifts the price, and every redeemed PLMB is burned, which shrinks supply. The gap closes when PLMB reaches $1 minus the fee, which is why the floor sits at $0.995 or higher. Nothing works the same way above $1. If PLMB trades at $1.02, borrowers can mint more and sell it, but that takes a decision and collateral. The ceiling is soft. ## Limits - A redemption can't touch a trove that is below 150%. If the lowest rate holds one, it has to be [liquidated](/docs/liquidations) first; until then redemptions at that rate fail. - A redemption needs a fresh price, like every action that values collateral. - When you sign, you set the least JitoSOL you will accept and the highest fee you will pay. If the price or the fee moves past them before the transaction runs, it fails and nothing changes. The app allows 1% of movement in the JitoSOL amount. ## Redeeming in the app 1. Open **Redeem** in the [app](/app). 2. Enter the PLMB to redeem. The app shows the fee now, the JitoSOL before and after the fee, and the troves it will reduce. 3. Choose **Redeem PLMB** and approve the transaction in your wallet. The board shows the cut before you sign: the part of the leftmost string the redemption will take turns into a dashed vermilion line.