Redemptions

At a glance
Input	A claim for units the investor holds free.
Output	The units burned; the payout on the ledger, in the payment asset, or in the investor’s bank account.
Settlement	On the ledger: one transaction on two registries, where the fund’s registry burns the units while the payment asset’s registry moves the payout. Off the ledger: the issuer burns the units, the venue settles the claim against that burn, and the fund pays through its bank.

Paid out on the ledger

The payment asset is any cash asset on the DA Registry, such as a bank’s tokenized deposit or a stablecoin. A fund may take several, each under its own consent, and each claim names the one it is paid out in. The example pays out in a tokenized deposit.

Who signs what

Transaction	Submitted by	Signed by	Seen by
Tx 1 · The claim (the venue’s record of a redemption)
Tx 2 · The price of this claim
Tx 3 · The payout request (the token standard’s allocation request)			and its custodian,
Tx 4 · The units set aside to be burned (an allocation)		, with the fund’s registry	; as executor
Tx 5 · The receipt of the payout readied (an allocation)		, with the payment asset’s registry	; as executor
Tx 6 · The request accepted		None
Tx 7 · Settle: units burned, payout made from the treasury	as executor	Nobody signs again	its legs; all of it, its treasury account included; its leg; its price, read

Tx 7 is one transaction on both registries: if either refuses its side, neither moves. Nobody signs again: the investor authorized its legs with its allocations, and the fund’s registrar (the burn) and its treasury account (the payout, in the payment asset only) with the fund’s standing consent.

Paid out off the ledger

When the fund pays out by bank transfer, the burn and the payment cannot be one transaction. The investor’s custodian asks the issuer to burn the units, naming the claim; the venue settles the claim against that burn, and the fund pays the proceeds through its bank.

Transaction	Submitted by	Signed by	Seen by
Tx 1 · The claim (the venue’s record of a redemption)
Tx 2 · The burn request, naming the claim: the units locked to the issuer
Tx 3 · The units burned		, on its registry
Tx 4 · The claim settled against that burn
Off the ledger · The proceeds, by bank transfer to the investor

The issuer can refuse a burn request, with a reason the investor reads; the units unlock and the claim stays open. The venue settles a claim only against a burn of exactly its units that names it.

Worked example

The payment asset (here a tokenized deposit) has two decimal places:


Claim	20 units
The price source’s price of this claim	1.00711
Units × price	20.1422
Paid, rounded down to the cent	20.14
Result	the investor’s units 20 lower, its deposit 20.14 higher, in one transaction

The rounding always favours the fund’s remaining holders. The demo (chapter 7) redeems 400 units at the day’s NAV, rounded down the same way.

Controls

The consent pays at the price the price source signed for this claim, and at no figure the venue hands over.
The treasury pays from its own account, in the payment asset only, and the venue settles nothing until the treasury holds enough.
Before a claim is recorded, the investor must be admitted and hold the units free, the fund must not be held, and its policy must allow the redemption (for example a lock-up or a daily limit). A frozen investor cannot redeem; one limited to “liquidate only” can.
If either registry refuses its side, nothing is burned and nothing is paid. A claim withdrawn after the investor set its units aside releases them in the same step.
The investor sees only its own claim; the fund’s issuer and treasury see the whole settlement; the payment issuer sees only its leg.

Do it

POST /v1/redemptions
{ "holderId": "alpha", "instrumentId": "FUND", "units": "20.0", "redemptionId": "red-td-1" }

POST /v1/redemptions/red-td-1:settle    # once priced: the payout request (Tx 3)
POST /v1/redemptions/red-td-1:settle    # once the investor has answered: settles (Tx 7)

# Paid out off the ledger: once the issuer has burned the units (Tx 3)
POST /v1/redemptions/red-1:settle

See Subscribe and redeem. Related: Subscriptions · Dealing cycles · Price the asset · Who runs what

Start here

Workflows

Foundations

Paid out on the ledger

Who signs what

Paid out off the ledger

Worked example

Controls

Do it

​Paid out on the ledger

​Who signs what

​Paid out off the ledger

​Worked example

​Controls

​Do it

Paid out on the ledger

Who signs what

Paid out off the ledger

Worked example

Controls

Do it