Fast settlement

How users can exit their positions before the end of the settlement process

While giving position token holders the possibility to challenge the submitted final value increases the trust in correct settlement, long settlement periods can result in a bad user experience. Position token holders have to wait for at least 24h following expiration until they can withdraw their funds.

This is not considered a problem in our view as service providers are expected to arise that will offer faster settlement in return for a small fee. In particular, the data providers themselves may step in to benefit from an additional revenue stream.

Example: Let’s assume the following two actors:

  • Karen has 1'000 long position token worth 1'000 DAI and wants fast settlement

  • Chad has 990 DAI and is willing to accept the settlement delay and the risk involved

Right after expiration date, Chad offers Karen to buy back her long position tokens for 990 DAI. If Karen accepts the offer, Chad will pay Karen 990 DAI in exchange for her long position tokens which he can then redeem for 1'000 at the end of the settlement period.

We expect the fast settlement fees paid to compress over time making the procedure completely invisible to users eventually.

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