# Understanding Withdrawals & Settlement

When withdrawing from a Troves vault, the process may differ depending on the **strategy type** used by the vault.

Some withdrawals are **instant**, while others may take **several hours to settle**.

This section explains why.

***

## Why Some Withdrawals Are Not Instant

Troves vaults deploy capital into multiple DeFi protocols to generate yield.

Examples include:

* lending markets
* liquidity pools
* leveraged positions
* liquid staking strategies

Because funds are actively deployed, Troves may need to **unwind positions before returning funds**.

#### Simplified Flow

> User requests withdrawal\
> ↓\
> Vault receives request\
> ↓\
> Strategy positions unwind\
> ↓\
> Assets returned to vault\
> ↓\
> User receives funds

This process may take time depending on the strategy.

***

## Two Types of Withdrawals

### 1️⃣ Instant Withdrawals

Some vaults support **instant withdrawals**, allowing users to exit their position immediately.

> User withdraws\
> ↓\
> Vault has idle liquidity\
> ↓\
> Funds returned instantly

Instant withdrawals are not simply dependent on idle liquidity in the vault. They are primarily determined by the vault design and execution complexity.

This typically occurs when:

* The underlying strategy can be exited without unwinding complex positions
* Actions required for withdrawal have minimal or no slippage impact
* Liquidity can be accessed without affecting market conditions

In simpler terms, if the vault strategy is low-friction and low-risk to exit, withdrawals can be processed instantly.

Vaults involving more complex strategies or market-sensitive positions may not support instant exits and instead rely on delayed withdrawals.

***

### 2️⃣ Delayed Withdrawals (NFT Settlement)

For certain strategies, Troves issues a **withdrawal NFT receipt**.

This NFT represents your withdrawal request while the vault unwinds the strategy.

#### Process

> Withdraw request\
> ↓\
> NFT receipt issued\
> ↓\
> Strategy unwinds positions\
> ↓\
> Funds settled\
> ↓\
> User redeems NFT for assets

Settlement typically occurs **within a few hours** depending on the strategy.

***

## Why Vaults Need Time to Unwind

Vault strategies may include:

#### Leveraged Positions

Vaults may borrow assets to increase yield.

Before returning funds, the vault must:

> repay borrow\
> ↓\
> close leverage\
> ↓\
> return assets

***

#### Liquidity Pools

If assets are deployed in LP pools, withdrawals involve:

> Remove liquidity\
> ↓\
> Convert tokens\
> ↓\
> Return underlying asset

***

#### Staking Derivatives

Some vaults interact with staking protocols.

For example:

> STRK → xSTRK

When withdrawing:

> xSTRK may need to be swapped back to STRK

This conversion can involve **DEX liquidity**, which may cause small price differences.

***

## Why Withdrawal Amount May Slightly Change

In some strategies, the vault must **swap assets on a DEX during withdrawal**.

Example:

> xSTRK → STRK

DEX prices can differ slightly from the protocol exchange rate.

This may result in:

* slightly higher withdrawal amount
* slightly lower withdrawal amount

A **0.1–0.2% spread is considered normal** due to market liquidity dynamics.

***

## Understanding Withdrawal NFTs

If your withdrawal issues an NFT:

* it represents your claim on the withdrawn funds
* it tracks the settlement process
* it can be redeemed once funds are available

#### Example Flow

> Withdraw 100 STRK\
> ↓\
> Receive Withdrawal NFT\
> ↓\
> Vault closes positions\
> ↓\
> Redeem NFT\
> ↓\
> Receive STRK + yield

***

## How Long Do Withdrawals Take?

| Strategy Type                     | Withdrawal Speed |
| --------------------------------- | ---------------- |
| Idle liquidity vaults             | Instant          |
| Lending strategies                | Minutes          |
| Leveraged vaults                  | 1–3 hours        |
| Complex multi-protocol strategies | Several hours    |

These times vary depending on:

* vault liquidity
* market conditions
* strategy complexity

***

## How to Check Withdrawal Status

Users can check their withdrawal status via:

1️⃣ Vault page

2️⃣ Withdrawal history

3️⃣ NFT receipt status

Once the strategy unwinds, the NFT becomes redeemable.

***

## Best Practices Before Withdrawing

To avoid surprises:

✔ Check vault strategy details

✔ Verify whether withdrawals are instant or delayed

✔ Consider market liquidity when withdrawing large amounts

***

## Example Withdrawal Lifecycle

> Deposit → Vault deploys capital\
> ↓\
> User requests withdrawal\
> ↓\
> Strategy unwinds\
> ↓\
> Vault receives assets\
> ↓\
> User receives funds