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How it Works

Detailed Flow

General overview

At first, the market maker deploys a Symbiotic USDC vault, which can be done easily through the Symbiotic frontend and factory, and decides to allocate the collateral to a DeFi Strategy while it is not in use.

This vault is associated with a “Market Maker Symbiotic Contract” that facilitates the execution logic and redemption flow.

The redemption flow is divided into six steps:

  1. An asset manager requests an RWA swap through a specific frontend or RFQ system such as the Symbiotic RFQ.
  2. The market maker has integrated the RFQ API and receives the request. They can then bid by signing an order and submitting it to the RFQ backend, as with any other exchange.
  3. The market maker triggers the transfer of USDC to the asset manager.
  4. The Market Maker Symbiotic Contract pulls the required USDC from the Symbiotic vault.
  5. The asset manager sends the RWA to the Symbiotic contract.
  6. The USDC is released to the asset manager atomically.

General overview

At this point, the market maker Symbiotic contract holds the RWA, and it needs to be redeemed for the underlying vault asset, USDC. This can be done in two different ways:

  1. The market maker acquires the RWA into their own portfolio and assumes the duration risk.
  2. The market maker redeems the RWA with the issuer. During this period, the RWA continues earning its intrinsic APY.