Tokenized MMF Redemption (USYC → USDC)
Same-day atomic redemption of tokenized MMF shares back to USDC — the liquidity advantage that defines tokenized funds vs. traditional MMFs.
CTR (USD 10,000+)TRAVEL-RULE (USD 3,000+)ENHANCED-DUE-DILIGENCE (USD 50,000+)
Step 1 · Redemption RequestPolicy-Enforced
The investor's redemption instruction — requesting conversion of USYC shares back to USDC.
Investor initiates redemption via Circle portal. L5 Application (Circle UI) and L4 Account (Circle compliance engine) are lit. Identity re-verification (D1) fires. Licensing (D8) checked. Redemption request enters Circle's settlement queue.
Step 2 · NAV & Liquidity GatePolicy-Enforced
The redemption gate — NAV confirmed and liquidity verified before burn.
Circle verifies current NAV and fund liquidity. This is the redemption gate: during business hours, settlement is instant (Circle commitment); otherwise next-business-day. The gate is policy-enforced at L5 — fund administrator discretion, not compiled into the contract. D9 (prudential) is the active domain. If liquidity is insufficient, Circle can suspend redemptions.
Step 3 · USYC Burn + USDC SettlementCode-Enforced
The atomic settlement — USYC burned and USDC transferred in a single transaction.
USYC shares burned on Arc at L3; USDC transferred to investor wallet in the same transaction. L3 Execution (burn contract) and L2 Consensus (Malachite BFT) are lit. Recordkeeping (D11), tax reporting (D12), and programmable compliance (D16) fire. The burn is code-enforced — irreversible once confirmed.
Step 4 · Investor USDC WalletPolicy-Enforced
The investor's updated balance — USDC received, USYC shares extinguished.
USDC arrives in the investor's wallet on Arc. L4 Account and L5 Application lit. Recordkeeping (D11) obligation fires — the redemption event is the taxable event. Investor's USYC balance is zero; USDC balance reflects the redemption at NAV.
Resolved 4 steps across 1 chain(s). 3 threshold(s) triggered. Frameworks: Bank Secrecy Act, GENIUS Act, OFAC Sanctions Program, FATF Recommendation 16 (Travel Rule), Common Reporting Standard / FATCA.