Fund Management
To ensure that the asset side of Sumplus remains robust, transparent, and always capable of meeting redemption needs, we implement strict fund management principles. These mechanisms govern how positi
1. Custody and OES Integration
All funds, including delta-neutral strategies, CeDeFi allocations, and LSD staking positions, are managed through Off-Exchange Settlement (OES) service providers.
This ensures that assets remain segregated, auditable, and retrievable at all times, reducing counterparty and custodial risk.
2. Fast Position Unwinding
In cases where funds must be withdrawn from the asset side (e.g., to replenish reserve margin pools), the system supports fast closing or unwinding of hedged positions.
Each asset type is assigned a maximum response window, which will be disclosed at product launch:
Typical window: no more than 3 days.
Fastest response: as short as 6 hours for highly liquid assets.
This window is not triggered by every user redemption, since reserve margin pools already cover a baseline of redemptions. Instead, it applies when Sumplus itself requests withdrawals from the asset side to restore liquidity buffers.
2. Phased Withdrawals
For large redemptions, the system may execute withdrawals in phases to minimize market impact and avoid sudden shocks.
This strategy ensures both user fairness and market stability while protecting long-term yield performance.
3. Slippage and Transaction Cost Assumptions
The protocol assumes a baseline transaction cost of 0.5% when closing positions or reallocating funds.
This buffer accounts for slippage, fees, and market impact under normal and stressed conditions.
These assumptions are built into the system’s risk models to ensure reserves remain sufficient.
4. Hedging and Liquidation Priority
When positions must be closed, the system follows a priority sequence:
High-liquidity positions (e.g., USDT/USDC allocations, delta-neutral derivatives).
Moderate-liquidity assets (e.g., LSD collateral in lending markets).
Lower-liquidity or longer-term positions (e.g., CeDeFi bonds, certain staking yields).
The exact sequence will be finalized and published upon product launch.
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