Withdrawals involve the burning of LP Token shares to receive Funding Tokens. Whales request withdrawals from the Indentura app by inputing the number of LP Token shares they want to redeem funding tokens for. The Indentura app shows the estimated value of Funding Tokens that whales would receive upon withdrawal . Once withdrawals requests are made, LP tokens are transferred from the whale’s wallet to the Indentura vault smart contract. Withdrawals are maintained in a pending state during the cooldown period after which withdrawals are processed by agents. The cooldown period is in place to enable agents and/or sharks to redeem deployed funds from the yield-bearing venues and transfer them back to the funding token. Pending withdrawals are viewable via the My Pool Holdings page.
After the cooldown period, agents process withdrawals based on the LP Token share-Funding Token exchange rate at the time of processing the withdrawal. Upon processing, LP Token shares are burned and the Funding Token amount is transferred to the LP token holder wallet.
The current value of the pool is 10,000 USDC. There are 8,000 LP Token shares outstanding. The exchange rate is 1.25 USDC per LP Token share. A whale submits a withdrawal request for 500 of their LP Token shares, which are transferred to the Indentura vault smart contract. The Indentura app shows that 625 USDC is estimated to be available for withdrawal.
The cooldown period is 7 days, after which the agent processes the withdrawal. The value of the pool is now 10,800 USDC and with 8,000 LP token share outstanding, the exchange rate is now 1.35 USDC / LP Token share. The withdrawal is processed and the whale is transferred 675 USDC (500 * 1.35).