> ## Documentation Index > Fetch the complete documentation index at: https://docs.arco.financial/llms.txt > Use this file to discover all available pages before exploring further. # Vault Liquidity Architecture Mainnet product guide draft · English v1.0 · 7 October 2026 [Docs Home](/index) ARCO Vaults connect asset recovery schedules with users’ withdrawal needs through Standard Redemption and Instant Redemption. Standard Redemption follows the product’s asset recovery and settlement cycle. Instant Redemption uses separately available liquidity to reduce waiting time and is designed around two routes: the Internal Liquidity Sleeve and the OTC Network. ## Overall Liquidity Flow ARCO Vault Liquidity Flow Standard Redemption follows each product’s asset recovery and settlement schedule (T+X). Instant Redemption uses available internal balances or an executable OTC quote, with redemption fees reflected in the payout. The T+0–2 days shown in the lower flow refers to ArcoUSD reserve replenishment measured from the MMF recovery request date (T). ## Redemption Routes | Route | Liquidity source and processing | Conditions to check | | - | - | - | | Standard Redemption | Funds are recovered from the product’s assets or strategy and paid after settlement | When the price is fixed, request cutoffs and processing cycles, costs and payout schedule | | Instant Redemption through the Internal Liquidity Sleeve | Direct redemption using internally held assets available for payout | Available balance, applicable price, fees and limits, and net proceeds | | Instant Redemption through the OTC Network | Connects a liquidity partner’s token purchase or redemption settlement liquidity | Confirmed quote, token transfer or burn method, payout timing and execution conditions | Each product specification states the routes offered and supported payment assets. Instant Redemption is available when there is sufficient liquidity or an executable OTC quote. Users can compare net proceeds and processing times across Standard and Instant routes. ## Standard Redemption Standard Redemption is the default route using the product’s own asset recovery and settlement procedures. For products connected to external funds, the fund’s business days, redemption cutoffs and settlement cycle can affect timing. Crypto native products follow the strategy’s withdrawal queue or capital recovery conditions. Product specifications distinguish request acceptance, price determination, token processing, payment readiness and completion. Pricing fixed at request and pricing based on settlement valuation follow the relevant product’s contract and interface. Requests awaiting payment after tokens have been burned are tracked as outstanding payment obligations. ## Internal Liquidity Sleeve The Internal Liquidity Sleeve consists of liquid assets held in a vault or the relevant product’s treasury. Internal direct redemption checks a valid price and available balance and processes token burning and payment together. The valuation of a deposit vault or external MMF does not itself represent a balance available for payout. ArcoUSD maintains an ample stablecoin reserve buffer to support ongoing swaps and withdrawals. The reserve is managed according to withdrawal demand, reserved amounts and settlement obligations, and MMF recovery cycles. When the available reserve falls below an operational threshold, rebalancing through MMF redemption and recovery begins, with the aim of replenishing the stablecoin reserve within T+0–2 days from the recovery request date (T). The operating specifications identify the relevant MMF’s business days, request cutoffs and settlement conditions. The internal sleeve is included among the assets held by the product. Available liquidity is calculated from balances available for payout after accounting for reserved amounts, existing payment obligations and restrictions on use. ## OTC Network The OTC Network connects liquidity partner funds as an instant withdrawal route alongside the internal sleeve. A partner quotes the product, quantity, payment asset, price, fees, quote expiry and payout timing. When a user accepts an executable quote, the withdrawal follows the agreed settlement method. In a token purchase, the user’s tokens are transferred to the partner and supply remains unchanged. Redemption liquidity arrangements that involve burning connect the token burn, user payout and subsequent settlement with the partner. The quote and product specification identify which arrangement applies. OTC routes do not all involve a burn and payout within a single transaction. Actual payment to the user is distinguished from underlying asset recovery and partner settlement. Even a T+0 arrangement follows its agreed execution and payout timing. A partner’s unused capacity is not added to vault-owned assets or balances already available for payout. ## Redemption Fees and Net Proceeds Instant Redemption applies a redemption fee for immediate liquidity. Fees and price adjustments for the internal sleeve and OTC routes are shown in the execution quote, allowing users to check their final net proceeds. The liquidity agreement defines fee recipients and allocation. ArcoUSD’s 1:1 redemption basis and the net proceeds from Instant Redemption are distinct. Even when the reference redemption amount for 1 arcoUSD is USD 1 worth of a supported asset, the amount received after an Instant Redemption fee may be lower. Product and settlement costs for Standard Redemption, as well as network fees, are disclosed under their respective conditions. ## Liquidity Shortfalls and Operations If internal balances or OTC execution capacity are insufficient, the relevant Instant route is restricted and the available Standard route and payout schedule are shown. Operations manage price validity, reserved payouts, asset recovery and settlement schedules, and partner exposure together. The status and payment obligations of requests already accepted or executed are tracked separately from restrictions on new transactions. | Operating area | Management requirements | | - | - | | Internal sleeve | Available balances, reserved amounts, replenishment thresholds, and responsibility for MMF recovery and rebalancing | | Standard requests | Price and quantity determination, payout order and outstanding obligations | | OTC quotes and execution | Expiry, counterparty, asset and quantity, token processing and payment confirmation | | Subsequent settlement | Distinguish user payment from partner repayment and avoid double-counting assets or liabilities | ## Related Guides * [Deposits and Redemptions](/liquidity/deposits-and-redemptions) * [NAV and Returns](/transparency/nav-and-returns) * [Security and Operations](/security/operations) See [Midas Open Liquidity Architecture](https://docs.midas.app/liquidity-and-composability/open-liquidity-architecture) for the reference architecture. ARCO’s routes and product conditions follow the design above and the relevant product specifications. This documentation is built and hosted on [Mintlify](https://mintlify.com), a developer documentation platform.