Liquidity and withdrawals
You own the position directly. A long holds a token in its own wallet, with no manager deciding what happens to it and no fund gate between you and your capital. The pool runs by rule. This page is how a long gets out, and what each speed costs.
You own it, nobody runs it
There is no portfolio manager. The capital sits in tokenized treasuries by rule, the premium accrues to long holders by rule, and a loss settles by rule. A long holds the long token and can move it, sell it, or redeem it without asking anyone. That is the difference from a fund, where a manager holds your money, decides the book, and can gate redemptions. Here you hold a claim on a transparent pool and the exit is yours to take.
The ways out
Capital comes out at the speed you are willing to pay for.
| Exit | Speed | What it costs |
|---|---|---|
| Free capital | Instant | Nothing. Capital not backing a live short is withdrawable at any time. |
| Queued | Within a term | Nothing. You take first claim on capital as shorts expire, bounded by the 90 day term. |
| Boosted exit | Instant if filled | Your accrued term yield, handed to a replacement long who takes over your backing slot. |
| Sell the token | Instant | A market price. The long token is transferable, so you can sell it on a secondary market without touching the pool. |
What if the pool is full
Full means every dollar is backing a short. There is no free capital to withdraw right now. You still get out, two ways.
- Wait. Shorts expire on their 90 day term and free their capital. Freed capital pays withdrawals first, before any new short, so the longest you wait is one term.
- Sell. Sell your pool token to another buyer on the open market, at whatever price it trades for. This does not touch the pool, so it works even when the pool is full.
Neither exit lets you escape a loss that is already happening. Once a loss is marked, your token price has already dropped, so both exits pay the lower price.
How the boosted exit works
When the pool is full your capital may be backing a live short, and the slow path is to wait for that short to expire. The boosted exit is the fast path. You forfeit the premium you have accrued this term and it is handed to an incoming long as a bonus on top of the going forward yield. That incoming long takes over backing the same short, your principal returns immediately at the current share price, and the short never notices because its coverage is continuous the whole time.
The longer you have held this term, the more you have accrued, so the bigger the boost and the more attractive your slot is to a replacement. The cost of jumping scales with what you would have earned by waiting, and you only pay it if you choose the fast path. Nothing is created or destroyed, your forfeited yield simply moves to whoever steps in for you.
Withdrawals create their own incentive
This is what fills the gap left by the locked term. A short that is already open does not reprice, so a fresh deposit cannot earn a higher rate off it. What pulls fresh capital into a full pool instead is the forfeited yield of the longs trying to leave. More exit pressure means more boosts on offer, which means more reason for replacement capital to step in. The pool recruits its own replacements out of the impatience of the people leaving.
The honest limit
No mechanism can force a buyer for risk nobody wants. In a real credit scare longs head for the exit and replacements may not come at any boost, because the same fear pushing longs out is keeping new capital away. Then the boosted exit goes unfilled and you fall back to the queue, out within the term as shorts expire, and you bear your share of any loss that lands while you still hold. A long is the first loss capital. The exit paths give you the fastest way out that a willing counterparty allows, not an escape from the risk you took.