Withdraw transactions redeem units and pay out liquidity.
When a withdrawal is initiated, the specified amount of funds is transferred from the MasterPool to the designated FeederPool, and subsequently deposited into the account of the requesting individual. During this transaction, the depositor’s balance of FeederPool Units is decreased, indicating a reduction in their investment within the FeederPool. Simultaneously, the FeederPool’s balance of MasterPool Units is also reduced, reflecting a decrease in its investment within the MasterPool.
Withdrawal Funds and Unit Flow
The protocol utilizes the following equations to update the system upon withdrawal initiation. The first equation determines the quantity of FeederPool units to redeem from the depositor. The second equation calculates the number of MasterPool units to redeem from the respective FeederPool. Lastly, the third equation decreases the MasterPool Value by the deposited funds, representing the overall decrease in funds within the MasterPool.
It can be shown that a Depositor's Value will decrease by their withdrawal amount following a withdraw transaction, and that the values of all other depositors remain unaltered.