Same-day atomic redemption of tokenized MMF shares back to USDC — the liquidity advantage that defines tokenized funds vs. traditional MMFs.
"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.
"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.
"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.
"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). 0 threshold(s) triggered. Frameworks: Common Reporting Standard / FATCA.
Coverage notes: 5 disclosed gap(s).