Withdrawal

How Withdrawals work

Users can deposit and withdraw assets into Bedrock at any time as there are seats left in a strategy and there In active withdrawal window for your given safe. Users must connect their wallet to the dApp , identify the Safe they deposited funds into and choose to Withdraw.

In oder to avoid a bank run during an adverse event we have implemented a withdraw delay. The protocol includes a fee free period (labeled as Pf) and a withdraw delay that helps our contracts understand when to avoid charging a fee.

The values for both are controlled by governance that controls how much the protocol charges to enable an 'instant withdrawal'.

The following illustrates how a Withdrawal can occur.

Assume the following:

A is the amount of the request.
D is the amount delay a user is willing to accept to withdraw. A Bedrock user selects this delay as part of the withdraw process.
Pf is the fee free period in hours, withdrawing after this time limit incurs no fees
safeXXX represents a Bedrock safe and strategy

A user sends a withdraw request to safe123with [amount A , delay D]
safe123 checks the users balance and reduces it by A if the request is valid
Depending on the Withdraw delay chosen (D) the protocol will calculate a fee.
1. $fee = A * max(0,Pf-D /Pf)^2$
2. If a fee is sourced from the user withdrawing half of this fee goes to a community pool, the other half is earned by the protocol.
After D hours have passed the user can source the requested withdraw amount which can be summarized as A - Fee.
Users who can wait several days to withdraw funds are subject to zero fees.

The fee model is unique per safe and there are safe's and strategies that do not charge any fees.

The Gherkin-like summary tries to use an example to explain the impact on the withdrawer.

FEE_FREE_PERIOD (Pf) is 96 (= 4 days) as a constant value
  If user wants to withdraw 1000 USDC in 24 hours
    withdraw_fee_percent = ((96 - 24) / 96) ^ 2 (56.25%)
    so he will pay 562.5 USDC as a fee and withdraw 437.5 USDC
  If user wants to withdraw 1000 USDC in 48 hours
    withdraw_fee_percent = ((96 - 48) / 96) ^ 2 (25%)
    so he will pay 250 USDC as a fee and withdraw 750 USDC
  If user wants to withdraw 1000 USDC in 72 hours
    withdraw_fee_percent = ((96 - 72) / 96) ^ 2 (6.25%)
    so he will pay 62.5 USDC as a fee and withdraw 937.5 USDC
  If user wants to withdraw 1000 USDC in 96 hours (or longer than it)
    withdraw_fee_percent = 0.00
    so he will pay 0.00 USDC as a fee and withdraw 1000 USDC //(Excluing Gas fees)

Users who can wait several days to withdraw are subject to zero withdrawal fees.

Last updated 1 year ago

FEE_FREE_PERIOD (Pf) is 96 (= 4 days) as a constant value If user wants to withdraw 1000 USDC in 24 hours withdraw_fee_percent = ((96 - 24) / 96) ^ 2 (56.25%) so he will pay 562.5 USDC as a fee and withdraw 437.5 USDC If user wants to withdraw 1000 USDC in 48 hours withdraw_fee_percent = ((96 - 48) / 96) ^ 2 (25%) so he will pay 250 USDC as a fee and withdraw 750 USDC If user wants to withdraw 1000 USDC in 72 hours withdraw_fee_percent = ((96 - 72) / 96) ^ 2 (6.25%) so he will pay 62.5 USDC as a fee and withdraw 937.5 USDC If user wants to withdraw 1000 USDC in 96 hours (or longer than it) withdraw_fee_percent = 0.00 so he will pay 0.00 USDC as a fee and withdraw 1000 USDC //(Excluing Gas fees)