Withdrawals

Withdrawals

Once the vault shares accrue enough yield, the tokenholder may want to withdraw the shares to realize their profits. User withdrawals on Nucleus is facilitated by a network of solvers.

To contextualize the solver based withdrawals, consider the problem of withdrawing supplied liquidity from lending markets. On lending markets, if the supplied liquidity is heavily utilized by borrowers, there may not be enough available liquidity for withdrawals, leaving lenders at the mercy of borrowers who need to repay its loans to replenish the pool’s liquidity.

Similarly, on Nucleus, if the assets are heavily utilized for yield strategies, there may not be enough liquidity to be withdrawn immediately. Also, because the vault can hold many different type of assets, even though there is enough unutilized liquidity in aggregate, there may not be enough of the specific asset that the user wants to withdraw into.

To solve this problem, Nucleus uses solver-based withdrawals, where the solvers can calculate an optimal routing for converting these multiple assets that were withdrawn into a single asset that the withdrawing user desires. Alternatively, the solvers can also bring in external liquidity to fill the users’ withdraw orders upfront by buying the user shares, proceeding to withdraw the shares for profit at a later date.

On the L1, due to gas constraints, the solver based withdrawals may have withdrawal delays (usually 24 hours) as the solvers need to fill withdraw orders in batches to avoid paying gas for too many frequent transactions.