Redeem (Sell)
Redeeming programmable derivatives on Plaza Finance
Last updated
Redeeming programmable derivatives on Plaza Finance
Last updated
Redemption, the opposite of , is the process of exchanging bondETH or levETH for an underlying pool asset from the Plaza Pool. Redemptions are denoted as a Sell on the Plaza UI. The Plaza Pool calculates the issuance rate for each token based on the following formulas:
The redemption price is determined by a conditional Automated Market Maker (cAMM) curve based on the vault's collateral level. You can redeem your bondETH tokens for an underlying pool asset at any time.
Estimated Pro-Forma Collateral Level = ((Quantity of ETH-related tokens in the vault× Oracle Price of ETH related tokens in the vault) - (Quantity of bondETH redeemed x 100)) ÷ ((Quantity of bondETH outstanding - Quantity of bondETH redeemed) × 100)
If Estimated Pro-Forma Collateral Level > 1.2: Redemption Price is the lesser of 100 USDC or current market price of bondETH
If Estimated Pro-Forma Collateral Level ≤ 1.2: Redemption Price adjusts to 80% of vault's collateral value per bondETH or market price, whichever is lower
The redemption price is determined by a conditional Automated Market Maker (cAMM) curve based on the vault's collateral level. You can redeem your levETH tokens for ETH related tokens in the vault at any time.
Collateral Level = (Quantity of ETH related tokens in the vault × Oracle Price of ETH related tokens in the vault) ÷ (Quantity of bondETH outstanding × 100)
If Collateral Level > 1.2: Redemption Price} = (Total Value of ETH related tokens in the vault in Vault - (100 × Quantity of bondETH outstanding)) ÷ (Quantity of levETH outstanding)
If Collateral Level ≤ 1.2: Adjusts to 20% of the vault’s collateral value per levETH or the market price, whichever is lower
Below is an example of the redemption flow. It is very similar to the create flow, except here it burns the derivative token provided and returns the user an allocation of the desired underlying pool asset. Here, we see the interactions between the pool, the oracle, and the token contracts.
