Liquidity

Symbiotic vault capital can be used both to provide economic guarantees to applications and to supply liquidity for additional use cases. Through specialized adapters connected to each vault, capital can be deployed just in time to redeem whitelisted assets, provide liquidity guarantees for predefined periods of time, or support other application-specific capital requirements, while remaining under the same unified collateral framework.

How it Works

Capital allocators deposit assets into a Symbiotic vault, which acts as the source of liquidity for the application. While this capital is not being used, the curator can allocate it across supported DeFi protocols to generate additional yield, ensuring idle collateral remains productive.

When a user requests liquidity, the application performs its own pricing and execution logic, determines the amount of capital required, and requests liquidity from the corresponding Symbiotic vault. Through dedicated adapters, the vault can release the required funds just in time to service the request. The user receives liquidity immediately, while the corresponding asset, guarantee, or claim is transferred to the application.

Following settlement, the application either manages the acquired position internally or waits until the underlying obligation matures. Once the assets are redeemed, repaid, or otherwise settled, the proceeds are returned to the Symbiotic vault, making the capital available for future requests. Throughout this process, the vault capital remains fully managed by the application while continuing to serve as the common collateral and liquidity layer across different use cases.

Case Study

Liquid Lane

Liquid Lane enables instant liquidity for assets that would otherwise require a delayed redemption process. Instead of maintaining idle liquidity buffers, Liquid Lane sources capital from Symbiotic vaults on demand, allowing users to settle immediately while the acquired asset is submitted for its standard redemption process with the issuer. This separates liquidity provision from the redemption process, improving capital efficiency for both liquidity providers and asset issuers.

1. Instant Redemption Request

When a user requests an instant redemption, Liquid Lane receives the request through an integrated frontend or API and forwards it to one or more solvers. Each solver evaluates the redemption request based on its own pricing and risk parameters before deciding whether to provide liquidity. Once a quote is accepted, the corresponding Symbiotic vault is selected to settle the transaction.

2. Instant Settlement

The selected Symbiotic vault releases the required capital through its dedicated adapter, allowing the transaction to settle atomically. The user immediately receives the underlying settlement asset, while the corresponding RWA is transferred to the solver's redemption contract. This removes the need for the user to wait through the issuer's native redemption period.

3. Standard Redemption

Following settlement, the solver initiates the asset's standard redemption process with the issuer. Throughout this period, the Symbiotic vault capital remains committed while the redemption is processed. Depending on the issuer and asset, the RWA may continue accruing its intrinsic yield until the redemption is completed.

4. Capital Recycling

Once the issuer returns the underlying settlement asset, the proceeds are transferred back to the Symbiotic vault. The capital immediately becomes available to service future instant redemption requests, while capital allocators retain the fees earned for providing liquidity during the redemption period.