You can use Delorean to buy future yield. Buying future yield means fronting money today, in exchange for repayment spread out over the future. The future payments have a higher face value, to compensate you for the time value of money.
You are effectively lending money, to be repaid by yield from a specific token. The compensation for this lending is based on the daily discount rate: payments are worth slightly less based on the number of days since the original transaction. Repayment is not tied to a specific borrower, but rather the combined yield output of the entire pool.
Let's walk through an example. Suppose there is a market on Delorean with a combined 500,000 GLP tokens. Associated with these tokens is 5 ETH net present value of future yield that has been sold by a number of different borrowers.
The 5 net present value of ETH represents the total amount available to buy. It can be purchased entirely by one person, or purchased in pieces by different people.
Let's say we purchase all 5 net present value ETH from the pool. This purchase entitles us to that present value of ETH, relative to the time of the transaction, but it doesn't make any guarantees about the timing of that payment.
Lets assume a daily discount rate of 0.1%, and an average yield rate of 0.4 ETH / day. The payments from escrowed tokens will look like this:
The bars in green represent yield payments that repay the 5 net present value of ETH. The gray bars are yield that is not owed the Delorean pool.
But what if the rate of yield is lower? Let's say it drops to just 0.25 ETH/day. The chart below shows the new scenario:
There are more green bars now. This represents the longer time it takes for us to collect our owed 5 net present value of ETH. However, the face value that we collect is also slightly higher, to compensate for the longer loan term, and the resulting APY is the same.