Understanding Withdrawals & Settlement

Why withdrawals may take time and what happens behind the scenes

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.

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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.

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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.

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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.

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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

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Liquidity Pools

If assets are deployed in LP pools, withdrawals involve:

Remove liquidity ↓ Convert tokens ↓ Return underlying asset

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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.

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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.

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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

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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

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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.

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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

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Example Withdrawal Lifecycle

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