# A simple example

Let's walk through a simple example of a transaction on Delorean, from beginning to end.

**Step 1: Alice locks tokens to sell future yield**

Alice holds 500,000 GLP. She wants to get some upfront liquidity on these tokens, so she locks them into an Delorean position.

Specifically, she locks in the next 10 net present value of ETH into this position. This net present value is relative to the time she opens the position, and the nominal value amount sold. If the underlying GLP generates yield very fast, the nominal amount paid might be 10.1 ETH in just a few months. If the GLP is slow to generate yield, it nominal amount may come out to 12 ETH over the next year.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2F7SvLP3JHxD090Y9yoRyA%2FScreen%20Shot%202023-02-24%20at%201.58.18%20PM.png?alt=media&#x26;token=b750764b-56b7-4407-a563-4b7f2f7934ef" alt=""><figcaption></figcaption></figure>

In exchange for locking the GLP, Alice receives a number of [NPV tokens](npv-tokens-and-liquidity) equal to net present value of her sold yield, which comes out to 10 NPV tokens.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2FgLuEDaK3awV5Bis69mfZ%2FScreen%20Shot%202023-02-24%20at%201.46.39%20PM.png?alt=media&#x26;token=b324904c-0769-47f5-af40-76a701a12dec" alt=""><figcaption></figcaption></figure>

However, Alice doesn't want NPV tokens. She wants ETH, so let's continue.

**Step 2: Exchange NPV tokens for ETH**

Alice takes her NPV tokens, and swaps them for ETH in an exchange like Uniswap.&#x20;

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2F2P6w4b9APvcCT3HU24aE%2FScreen%20Shot%202023-02-24%20at%2012.20.51%20AM.png?alt=media&#x26;token=2c26b0a1-eb62-44da-8071-1370d2f9776b" alt=""><figcaption></figcaption></figure>

A liquidity provider is market making on this pair, with his liquidity concentrated around 1 ETH per NPV token. The liquidity provider makes a profit from the swap fee.

**Step 3: Bob buys NPV tokens so he can get future yield**

Bob wants to buy future yield. However, he only has ETH in his wallet.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2FiPiWxCC8NP9ZSxM6fOx9%2FScreen%20Shot%202023-02-24%20at%202.12.22%20PM.png?alt=media&#x26;token=f6a4fbfd-98e2-4939-8873-a0949cb48451" alt=""><figcaption></figcaption></figure>

To buy future yield, Bob needs NPV tokens. Bob goes to the same liquidity pool that Alice used, and performs the opposite swap.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2FWcQshfzvOyY0WiH7ELFa%2FScreen%20Shot%202023-02-24%20at%201.53.47%20PM.png?alt=media&#x26;token=12c8be7f-d383-4a86-84de-58f974e5dd1b" alt=""><figcaption></figcaption></figure>

Bob has 5 NPV tokens now. He's ready for the next step.

**Step 4: Bob buys the future yield**

Bob takes his 5 NPV tokens, and swaps them for future yield in the Delorean pool. He gets a share of the future yield in the pool, which is shown below by the lime highlight.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2FP2evIgXFVtHQrxyyEYDI%2FScreen%20Shot%202023-02-24%20at%202.15.45%20PM.png?alt=media&#x26;token=c59d6ef3-8b09-4d68-ad3e-42839bd00ee2" alt=""><figcaption></figcaption></figure>

Once Bob receives 5 net present value of ETH, relative to the time of his purchase, his position is closed, and he does not receive any more yield from the pool.

Just like the Alice's sale, the nominal value that Bob gets depends on how fast the underlying GLP generates yield. If it's fast, he might get 5.1 total ETH over a few months. If it's slow, he might get 6 total ETH over a year or so.

**Step 5: Alice unlocks her tokens**

Three month pass, and Alice's GLP has generated 5 ETH so far, equal to 4.9 net present value ETH relative to the time of her transaction. She still owes 5.1 net present value ETH. Rather than wait another few months, Alice wants to unlock her tokens now.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2FHZpcDOqIqZ0a5ScwqlhY%2FScreen%20Shot%202023-02-24%20at%202.24.19%20PM.png?alt=media&#x26;token=c409a357-9feb-4fe1-823a-fda302c7b8b5" alt=""><figcaption></figcaption></figure>

Alice close her position by paying 5.2 ETH into the pool, which comes out to 5.1 net present value ETH relative to when she made the initial sale.

<figure><img src="https://3215095050-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMkYPaZqMeGpc74AYMHr0%2Fuploads%2FwTnXRWcpTRTKLYiG8nrg%2FScreen%20Shot%202023-02-24%20at%203.09.05%20PM.png?alt=media&#x26;token=67cf20d0-75a2-45d7-9ed9-bfe25869da42" alt=""><figcaption></figcaption></figure>

She does this, and recovers her underlying 500,000 GLP tokens.

