Hourglass, a crypto startup, has launched the first-ever trading platform for Time-Bound Tokens. This is a unique concept which tokenizes an individual’s staked assets within a DeFi protocol according to its lock-up period.

The marketplace allows users to exchange their position in line in exchange for assets that have been locked into a protocol. This is essentially transferring ownership from one user to another. Charlie Pyle is the founder of Hourglass. “You can take a token that has a set time limit and easily transfer ownership to another buyer.”

Hourglass marketplace launches coincides with Lido Version 2 deployment this week. In a press statement, the startup said it would tokenize Lido’s withdrawal queue which could otherwise “clog up the exit path for months or weeks.” The users can “trade” their position in the queue for withdrawals of their staked Ether and gain liquidity while waiting.

DefiLlama reports that Lido is currently the leading liquid staking platform for the DeFi ecosystem. It has more than 12 billion dollars in TVL across the Ethereum eco-system.

What it does

Simple: TBTs will enable users to unlock their assets and gain liquidity by selling rights for the duration of time on a secondary marketplace. Hourglass stated in a release that “TBTs represent staked assets that are committed to DeFi protocols for a certain period of time.”

The statement said that Hourglass would support everything, from trading locked frxETH tokens [ Frax Ethereum Token] and early withdrawals from Lido’s withdrawal queue.

If a user stakes 10 Frax Ether into the Frax Protocol for a whole month, they will receive 10 TBTs, along with any stake rewards, that can be traded on the market.

The platform, like any secondary market will offer discounts on TBTs depending on the length of time the asset is locked up. Pyle said that a trader might bid 3% off ether (ETH) with a lock-up period of 10 months. The discount would change depending on how long the asset has been locked up.

Pyle explained that the TBTs are semi-fungible tokens, based on ERC1155s standards. Pyle said that although the smart contracts were called custodians, the TBTs were non-custodial. This means the founding team would not have control over assets deposited.

Read more: What is a “Semi Fungible” Crypto Token?

Pyle said that the locked assets, to which the TBT represents ownership, will be held by the custodian’s smart contracts. At the end of the lock-up period users can redeem the matured TBT in exchange for the asset.

Hourglass will not charge any fees to trade on its platform.

Hourglass raised $4.2 Million in a Seed Round led by Electric Capital. Investors included Coinbase Ventures and Circle Ventures. hack.vc, as well as other angel investors.

Read more: Ethereum’s Shanghai upgrade spurs institutional investment into staking

Stephen Alpher edited the book.