Redemption

The redemption system provides two execution paths based on AssetReserve liquidity availability, ensuring users maintain continuous access to their collateral.

RedemptionFlow

NUSD redemption process flow

Instant Redemption

The primary redemption path, executed when AssetReserve holds sufficient collateral to immediately fulfill requests.

Process Flow

Initiation

User calls redeem() on Router.sol with parameters:

NUSD amount to redeem
Desired collateral asset
Beneficiary address

Liquidity Verification

Router queries AssetReserve liquidity status
Executes quoteRedemption() to validate collateral availability
Routes to appropriate Redeemer contract upon confirmation

Valuation & Calculation

The Redeemer contract performs:

Fair market value determination for NUSD-to-collateral conversion
Output calculation considering:
- Slippage protection: order.collateralAmount as minimum output
- Rate limiting: Enforces maxRedeemPerBlock constraints

NUSD Burning

Redeemer executes burn() on NUSD.sol contract
User's NUSD removed from total supply
Transaction atomically reduces circulating NUSD

Collateral Release

Router calls processRedemption() on AssetReserve
Collateral transfers to beneficiary address

Queued Redemption

Alternative path activated when requested collateral temporarily exceeds available AssetReserve liquidity.

Process Flow

Initiation & Liquidity Assessment

User initiates standard redemption via Router.sol
Router detects insufficient collateral for immediate execution

Request Queuing

User's NUSD transferred to Router contract for custody
Router generates redemption Order with:
- Unique request ID (auto-incremented)
- Status: PENDING
- Storage in redemptionRequests mapping

Keeper Monitoring

Authorized keepers (REDEMPTION_KEEPER_ROLE) monitor and execute:

Track AssetReserve liquidity replenishment
Identify serviceable pending requests
Call serveRedemptionRequest() with request ID

Deferred Execution

Upon keeper activation:

Router retrieves queued Order details
Executes standard redemption flow using custodied NUSD
Redeemer performs oracle valuation and burning
AssetReserve releases collateral to original beneficiary
Updates request status to COMPLETED

System Guarantees

This dual-path architecture ensures:

Liquidity Efficiency: Instant redemptions when possible
Redemption Certainty: Queued system guarantees eventual execution
Transparency: All pending requests tracked onchain
Protocol Stability: Rate limits prevent liquidity runs

The system prioritizes user experience while maintaining protocol solvency, creating a robust redemption infrastructure that adapts to varying liquidity conditions.