> ## Documentation Index
> Fetch the complete documentation index at: https://docs.aarc.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Liquidity Framework

> Buffer mechanics, gating, and liquidity management

The liquidity framework balances instant access with yield generation through a structured buffer system.

## Buffer Overview

| Parameter     | Value                                       |
| ------------- | ------------------------------------------- |
| Target Buffer | 32% of NAV                                  |
| Hard Floor    | 10% of NAV                                  |
| Custodian     | Archax Ltd (FCA-regulated)                  |
| Rebalancing   | Monthly, aligned with SSBAF dealing windows |

The buffer serves three functions:

1. **Instant liquidity** for redemptions
2. **Subscription absorption** for instant minting
3. **Operational flexibility** for fee payments

## Why 32%?

The buffer exists so investors can exit without waiting for monthly fund redemptions. 32% is high enough to handle normal redemption patterns and moderate stress, while leaving 68% deployed for yield.

We accept the yield drag as the cost of providing genuine liquidity.

## Buffer Status Thresholds

Operations reference graduated buffer levels relative to NAV:

| Buffer % of NAV              | Status        | Typical response                       |
| ---------------------------- | ------------- | -------------------------------------- |
| Greater than or equal to 32% | Normal        | Full instant redemptions within limits |
| 20% to 32%                   | Elevated      | Enhanced monitoring                    |
| 15% to 20%                   | Strained      | May reduce per-wallet limits           |
| 10% to 15%                   | Critical band | Further restrictions; possible gating  |
| At or below 10% (hard floor) | Hard floor    | Instant redemptions paused; queue-only |

Restrictions are ordinarily eased once the buffer exceeds 20% of NAV for three consecutive business days, with fuller restoration once it exceeds 32% for three consecutive business days.

## Why 10% Hard Floor?

The 10% floor ensures some instant capacity always exists. We will not completely exhaust the buffer serving early redeemers at the expense of later ones.

## Stress Response

During periods of elevated redemptions, the system implements protective measures:

* Per-wallet and aggregate limits to ensure fair access
* Instant operations may be paused while primary redemptions remain open
* Buffer is restored through SSBAF redemptions at monthly windows

### Investor notices (indicative)

When the buffer enters a strained band or the issuer imposes material limits on instant access, affected investors are ordinarily notified as soon as practicable, typically within **24 hours** of the decision.

If redemptions are suspended (other than immediate sanctions or compliance actions requiring urgent response), the issuer ordinarily aims to give at least **5 business days' notice** where practicable under the Subscription Agreement.

<Info>
  Notice timelines are indicative. The Subscription Agreement and Transaction Documents govern in any conflict.
</Info>

<Info>
  Under normal operations, BTCY transfers are permissionless. An emergency pause exists for critical security events only; see [Governance](/security/governance). The design intent is to keep transfers permissionless except in those events.
</Info>

## SSBAF Fund-Level Gate

The underlying fund imposes an **80% fund-level gate** per dealing window. If total SSBAF redemption requests exceed 80% of fund NAV in a window, the gate triggers:

* All investors receive pro-rata allocations
* Unfilled portions roll to next monthly window
* Extends worst-case exit time

<Warning>
  The issuer has no control over this gate. If SSBAF gates, investor redemptions depending on those assets will be delayed.
</Warning>

## Liquidity Paths

Multiple paths to liquidity operate in parallel:

| Path               | Timeline   | Notes                    |
| ------------------ | ---------- | ------------------------ |
| Instant Buffer     | T+0 to T+2 | Primary liquidity source |
| Monthly Redemption | 30-45 days | Via SSBAF dealing window |
| Secondary Market   | Instant    | DEX trading (planned)    |

<Warning>
  Timeframes are indicative only. Actual settlement depends on buffer capacity, SSBAF liquidity, and market conditions. Full settlement may take longer than 90 days; in extreme circumstances it may exceed 180 days or redemptions may be suspended indefinitely, as described in the Subscription Agreement.
</Warning>

## Suspension of Redemptions

The issuer may suspend redemptions in certain circumstances:

* Market disruption events
* SSBAF suspending redemptions
* Blockchain disruption
* Regulatory order
* Protection of noteholders as a whole

**During suspension:**

* No redemptions processed
* No limit on duration
* Investors unable to exit

<Card title="Redemption Details" icon="arrow-right-from-bracket" href="/investors/redemption">
  Detailed redemption mechanics
</Card>

***

<Note>
  Available only to eligible professional/qualified investors on an invite-only basis, subject to onboarding and compliance approval. For informational purposes only and not investment advice. Not an offer to the public or a solicitation where unlawful. No retail distribution. Not available to US Persons.

  [Disclaimers](/legal/disclaimers) · [Platform and issuer](/legal/platform-legal)
</Note>