What's the use case for the Interest Bearing Mint Token Extension?

Question

The Interest Bearing Mint token extensions seems allow for a "interest rate" to be configured directly on the Mint Account. The interest accrued is then only a UI calculation for a given amount using the "amount_to_ui_amount" instruction.

An example use case mentioned is for bonds, but I'm not sure how that would work.

• If new tokens are minted from a Mint Account that has this extension enabled, would the UI calculation for accrued interest be based on the entire life of the mint account (instead of accruing starting from when the minting occurs)?
• Would a new mint account be required for each bond issuance, and then holders redeem for the calculated UI amount?
• Since the accrued interest is only a calculation based on an amount and the data stored on the Mint Account, do tokens even need to be minted?

Answer 1

If new tokens are minted from a Mint Account that has this extension enabled, would the UI calculation for accrued interest be based on the entire life of the mint account (instead of accruing starting from when the minting occurs)?

It would be based on the life of the mint account, so you need to convert the UI amount you want to mint into an amount before minting.

Would a new mint account be required for each bond issuance, and then holders redeem for the calculated UI amount?

Maybe, it depends on the use case. You could also re-use the same mint and update the yield. The interest-bearing calculation takes into account updates to the interest rate over the lifetime of the mint.

Since the accrued interest is only a calculation based on an amount and the data stored on the Mint Account, do tokens even need to be minted?

Again, it depends on the use case, but probably not! You'll just need to transfer the accrued amount out