> For the complete documentation index, see [llms.txt](https://docs.upshift.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.upshift.finance/vault-architecture/atomic-redemption-vault.md).

# Atomic Redemption Vault

The Atomic Redemption Vault turns a tokenized-asset vault into a real-time settlement account. Redemptions are settled instantly at the moment they are requested with no withdrawal queue, no pre-funded buffer, and no manual operator intervention. Idle capital continues to earn yield right up until the instant it is needed for settlement.

<table><thead><tr><th width="135.30859375"></th><th></th></tr></thead><tbody><tr><td><strong>Pattern</strong></td><td>ERC-4626 tokenized vault with an attached instant-settlement module</td></tr><tr><td><strong>Deposit Asset</strong></td><td>Any ERC-20 token (e.g. USDC, USDT, WETH, WBTC)</td></tr><tr><td><strong>Share Token</strong></td><td>Fungible share token issued by the vault</td></tr><tr><td><strong>Redemptions</strong></td><td>Atomic; shares converted to the reference asset and settled in one transaction</td></tr><tr><td><strong>Liquidity Source</strong></td><td>Built-in settlement module backed by Aave / Morpho lending markets</td></tr><tr><td><strong>Yield</strong></td><td>Earned on idle balances until the moment of redemption</td></tr></tbody></table>

## The Problem

Tokenized-asset vaults conventionally impose a multi-day withdrawal queue on every redemption. A holder requests a redemption, the request enters a queue, the curator unwinds positions to raise the underlying, and the holder claims their funds days later in a separate transaction.

Any application that needs predictable, on-demand liquidity from such a vault such as payments rail, a settlement layer, a treasury sweep, or any integrator that must pay out the moment a user acts is not suited to tolerate that latency. The standard workaround is to pre-fund a separate cash buffer or credit line that fronts redemptions while the queue clears. That buffer sits idle, earns nothing, introduces counterparty risk, and has to be topped up and rebalanced by hand.

## The Solution

The Atomic Redemption Vault settles a redemption in a single transaction. When a redemption is requested, the vault converts the holder's shares to the reference asset of the vault and pays out atomically. A built-in liquidity layer guarantees that settlement capital is always available, while the remaining balance stays deployed in yield strategies. There is no request-and-wait cycle and no separate claim step: the conversion, the liquidity recall, and the payout all happen inside one atomic operation.

## Why an Atomic Redemption Vault

<table><thead><tr><th width="176.6171875"></th><th width="180.8359375">Pre-Funded Cash Buffer</th><th width="182.47265625">Classic Vault + Queue</th><th>Atomic Redemption Vault</th></tr></thead><tbody><tr><td><strong>Settlement speed</strong></td><td>Instant (from buffer)</td><td>1–7 day queue</td><td>✓ Instant (from vault)</td></tr><tr><td><strong>Capital efficiency</strong></td><td>Low (cash sits idle)</td><td>High (illiquid)</td><td>✓ High and liquid</td></tr><tr><td><strong>Yield on balance</strong></td><td>None</td><td>Yes, but locked</td><td>✓ Yes, until moment of redemption</td></tr><tr><td><strong>Liquidity management</strong></td><td>Requires manual top-ups</td><td>Manual rebalancing</td><td>✓ Fully automated</td></tr><tr><td><strong>Asset conversion</strong></td><td>External DEX / OTC</td><td>External DEX / OTC</td><td>✓ Native, oracle-priced</td></tr><tr><td><strong>Integration</strong></td><td>Custom build</td><td>Custom build</td><td>✓ Standard vault interface</td></tr></tbody></table>

## Key Capabilities

### **Instant settlement**

Converts shares to reference asset and settles atomically in a single transaction. No request-and-wait cycle and no separate claim step.

### **Yield until the moment of redemption**

Balances earn yield in the settlement module and curator strategies until the instant they are needed. There is no trade-off between earning and liquidity.

### **Always-on liquidity**

The vault auto-pulls funds from the yield layer the moment settlement requires it. No operator intervention and no manual rebalancing.

### **Configurable risk controls**

Oracle price guards, per-transaction rate limits, redemption fee caps, and spread bounds protect the vault under high-velocity redemption flow. Each parameter is configurable per vault.

### **Native, oracle-priced conversion**

Shares are converted to the reference asset natively at oracle-referenced NAV, with no dependency on an external DEX or OTC desk to source the settlement asset.

### **Standard vault interface**

The vault exposes a standard ERC-4626 interface, so integrators connect through the same deposit / redeem surface they already use for any other vault.


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