Redemptions allow investors to exit a strategy by exchanging their shares for USDT. To ensure fairness, protect the strategy’s stability, and prevent abuse, GRVT enforces the following rules:
Minimum and Maximum Redemption Period
Each strategy sets a minimum and maximum redemption period.
During the minimum period, the request is inactive.
After that, it becomes eligible for processing automatically if the auto redemption balance is >0.
It is the manager's responsibility to make the auto-redemption balance sufficient in order to service all incoming redemptions Before the maximum redemption period. .
If redemption requests are unprocessed by the maximum period, the protocol forces redemptions.
Auto redemption balance
A strategy can auto-fulfill redemption requests if it has safe excess capital based on an auto redemption barrier. The Auto Redemption Barrier (ABR) is a safety multiplier set by a manager that determines how conservatively capital is reserved before allowing automatic fulfillment of redemption requests. It adjusts how much of the initial margin must remain untouched to maintain risk thresholds.
A lower ABR (e.g., 0.8/80%) makes it easier to auto-redeem by requiring less margin buffer.
A higher ABR (e.g., 2.0/200%) is more conservative, requiring more margin to be set aside before redemption is allowed.
A autoRedemptionBalance that is greater than 0 can process redemptions without manager intervention.
autoRedemptionBalance = availableBalance - initialMargin * autoRedemptionBarrier
Redemption Queue
Redemption requests enter a queue when submitted. They are not processed immediately but follow an ordered system based on eligibility and priority. In particular, requests are prioritized using a hybrid model:
Requests post the maximum redemption period are prioritized.
FIFO(First in First Out, meaning redemptions requested earlier are prioritized.
Smaller redemptions may be pulled ahead to reduce market impact based on predetermined logic.
How does protocol force redemptions automatically after Max Redemption Period?
After the max redemption period passes, the protocol automatically processes the redemption on behalf of the investor, even if the Vault Manager does not approve it. In nearly all cases, this happens immediately once the period expires. However, if fulfilling the Redemption would push the vault’s leverage beyond 80x, breaching a 1.25× maintenance margin threshold, the redemption will be retried automatically until it can go through without violating leverage constraints. These constraints are enforced in order to make sure that the fault does not go under heavy loss. If redemption still cannot be processed after 48 hours from the max redemption period, the vault will be delisted, and no new investments can be accepted.
As a further safeguard, when the protocol sees that a redemption is nearing the max redemption period, it triggers this IM increase in advance. This discourages stalling and helps ensure that redemptions are resolved before forced redemption becomes necessary. When a redemption request crosses 90 percent of the max redemption period, the protocol increases the required initial margin for the strategy. For example, if a strategy has total equity of 100k and an initial margin account of 80k, and a 30k redemption crosses the 90 percent threshold, the new IM requirement becomes 110k. Since the IM is now higher than the equity, the strategy is restricted to making only risk-reducing trades. This creates pressure on the manager to process redemptions quickly, since redeemed funds still receive a share of PnL but no longer provide liquidity to the strategy.
