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Direct Deposit/Withdraw

How to swap out of a position in Stronghold

Summary

The liquidity of the Stronghold Index is concentrated on the main network. In an event where the swap size is too high, the protocol will trigger a high slippage warning which will prompt the user to direct deposit/withdraw on the mainnet of that particular stronghold.

Direct Deposit

Direct deposit is for users who are swapping large amounts of underlying assets for index tokens. During a direct deposit, the protocol mints new index tokens instead of swapping with the liquidity pool. Therefore, there is no protocol fee or slippage. The direct deposit swap rate will be the index token's true token value at that given point in time. The direct deposit is an instant process and after the direct deposit is completed, the user will receive their index tokens.
UI prompt for users to direct deposit
When users are swapping in large amounts from EVMs, a UI prompt will appear indicating to users to bridge their underlying assets to the main network to perform a direct deposit.
For example: For the USDC stronghold, the underlying asset on BSC EVM is BUSD while the underlying asset on the ETH mainnet is USDC.
UI prompt for user to bridge their underlying asset to mainnet
Users are encouraged to use the bridge recommended on the UI when bridging their underlying assets from the EVMs to the mainnet. Please check if the underlying asset on the mainnet is the same as the asset on the EVM.

Direct Withdraw

Direct withdrawal is for users who are swapping large amounts of index tokens for the underlying assets. During a direct withdrawal, the protocol burns the index tokens instead of swapping with the liquidity pool. Therefore, there is no protocol fee or slippage. The direct withdrawal swap rate would be the index token’s max projected rate at that given point in time. The max projected rate refers to the maximum swap rate the user would receive given that none of the individual option vault(s) within the stronghold is ITM. The max projected withdraw balance refers to the maximum amount of all of the unexpired individual option vault(s) in the stronghold given that none are ITM. If any of the option vault(s) are ITM, the losses would be shown in the “Direct Withdraw Schedule”.
UI prompt for users to direct withdraw
UI showing the Direct Withdraw Schedule after the user has initiated the direct withdraw process
Before initiating the direct withdrawal process, users should check the direct withdrawal schedule to know when the last option vault(s) expires. There is a direct withdrawal schedule as the underlying assets are collateralized into the respective individual option vault(s) when the underlying assets were deposited/swapped in. Users have to wait for each individual option vault(s) within the stronghold to expire before they can claim their direct withdrawals.