sUSDai Withdrawal Estimates

sUSdai has two separate price feeds to prevent yield sniping.

• Redemption Share Price: Price received when withdrawal each month

• Deposit Share Price: Price per sUSDai received when staking USDai

sUSDai receives periodic loan repayments that increase vault NAV. If deposits and redemptions used the same settled redemption price at all times, a user could deposit right before a known repayment, capture the NAV increase, and then redeem shortly after. Because deposits and redemptions are permissionless, that would create a timing arbitrage against existing holders.

Using the redemption share price for everything would not fully solve this either. Since redemption windows are global and not tracked per depositor, users could still attempt to deposit near the end of a redemption window and benefit from timing around the next serviced cycle.

To address this, the deposit share price continuously prorates expected upcoming repayments across all loans in the book. This means new depositors enter at a price that already reflects the yield expected to accrue over the period. The redemption share price, by contrast, is based on settled repayments and realized vault accounting, so users withdrawing do not receive value before it has actually been received by the vault.

The difference between these prices is usually small, but it can vary based on the timing and size of upcoming repayments. This is a series of approximations because the system linearly prorates upcoming repayments across the active loan book, rather than applying a fixed redemption fee.

What would happen without this mechanism?

1. Bob holds sUSDai for the full month while the vault earns repayments.

2. Alice waits until 1 minute before a large repayment hits, deposits at the old NAV price, and captures a large NAV step-up, for example +2% to +5%, despite taking almost no time risk.

3. Alice can then redeem shortly after and extract yield that was economically earned by Bob and other long-term holders.

This is why we use the forward pricing mechanism so that the protocol operates fairly, though USD.AI will improve the UI to populate a tighter range.

The difference between the 2 prices is usually small, but it exists because the vault has to approximate timing across monthly repayments, permissionless deposits, and global redemption windows. Some systems use a fixed redemption fee to address this. sUSDai instead uses dynamic forward pricing to make the pricing more economically accurate.

Latest updates:

1. Fairvalue has shifted from 1.089 to 1.087.

   1. Note this now tracks the redemption share price instead of the deposit share price: https://arbiscan.io/token/0x0B2b2B2076d95dda7817e785989fE353fe955ef9#readProxyContract "37. redemptionSharePrice"

2. Disclaimers are added to the withdrawal and deposit flows.

3. Optimistic share pricing is detailed in the docs. New entreis will be added for the delta change.