Providing Liquidity
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Swap has three liquidity instruments. Each is a claim in the asset deposited, but their seniority, valuation and exits differ. The current deployment is testnet; check the applicable vault’s terms before depositing.
Stock Inventory
Deposit one Stock Token into its Regular or Continuous vault. The senior claim is denominated in that stock, normally one deposited token per share. Inventory is used for trading and can leave the vault. Recoverable assets may fall below the normal claim if the engine is impaired.
- Regular: inventory is available only with a qualifying reference. It is recalled ahead of the scheduled close and cannot be assigned a closure loss.
- Continuous: inventory can also serve Discovery. It remains exposed to the closed-hours book and its opening reconciliation.
Both retain the deposited asset’s price and issuer risk. Separate in-kind claims remove the need to deposit an asset pair; they do not remove engine solvency risk. The token’s dividend and split multiplier is an issuer mechanism, not venue income.
Senior USDG Vault
Deposit USDG to fund the engine’s stock purchases. The claim is senior and denominated in USDG, normally one USDG per share. On the sale legs it funds, its priority sits behind the relevant stock-vault claim. USDG issuer risk and engine impairment remain.
This vault is not the Backstop. Senior USDG supplies inventory; the Backstop supplies junior risk capital.
Backstop
Deposit USDG for a junior claim at marked net asset value. Shares are variable-value, not a fixed USDG redemption promise. The Backstop absorbs inventory losses pro rata with the Engine Reserve before the affected senior claims.
An entry request is not an active position. Entry is priced when it settles after the required valuation. Exit is also valued at settlement, not at the time the holder requests it. Shares remain exposed until cash is reserved.
Exits and Queues
| Instrument | Available Exit | When It Must Wait |
|---|---|---|
| Stock Inventory | In the deposited stock, while free inventory covers the exit and no older request has priority. | Used inventory must be restored. Requests queue by epoch, first in first out between epochs and pro rata within an epoch. |
| Senior USDG Vault | In USDG, subject to free inventory and older requests. | The same senior queue discipline applies while USDG is in use. |
| Backstop | In USDG after notice, valuation and any required opening-gap settlement. | Requests are processed first in first out within a daily budget bounded by free cash, utilisation and post-exit risk headroom. |
A queued request, a funded request and a claimed withdrawal are distinct stages. Funding reserves the assets; claiming transfers the reserved amount. A displayed queue horizon is an estimate, not a settlement deadline. The Backstop notice duration and budget parameters must be read from the applicable testnet terms, not inferred from an illustrative app value.
What Each Holder Can Lose
- Stock inventory: the stock can fall in value; issuer restrictions can prevent transfer; a loss beyond funded protection can impair the affected claim. Regular’s closure exclusion does not remove other risks.
- Senior USDG: the stablecoin can lose value or become restricted, and an extreme engine loss can reduce recoverable USDG.
- Backstop: marked inventory losses reduce net asset value and can exhaust the deposited capital. Notice does not fix the value or ensure immediate liquidity.
Contract or chain failures can cause additional loss or delay for every instrument. The Engine Reserve is not a fourth deposit instrument and cannot be redeemed by Backstop holders. Read Risk and Coverage and the loss waterfall before supplying.
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