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Instant Liquidity Layer - Technicals

5. Pathfinder Liquidity Pool — Technical Detail

Liquidity Tiers

Tier
Liquidity Time
Example Assets
Role in Pool

A — Immediate

< 1 block

Hot wallet USDC, same-chain CCT yield tokens

Covers 100% of expected instantaneous withdrawals

B — Short-term

< 1 day

On-chain lending positions, tokenized overnight repos

Backstop for large withdrawals, low unwind risk

C — Mid-term

1–7 days

Uniswap v3/v4 LPs, tokenized treasuries, staking derivatives

Collateral for synthetic IOUs, higher yield

Synthetic Flash-Loan IOUs

When Tier A liquidity is insufficient for a given draw:

  1. Synthetic credit is issued to the PLP, collateralized by Tier B/C assets.

  2. Credit is repaid as positions unwind or new deposits arrive.

  3. Underlying assets may continue earning yield during IOU periods.

  4. Accounting is on-chain and auditable.

Benefits:

  • Smaller Tier A footprint while guaranteeing instant liquidity.

  • “Stacked yield” — fees + underlying asset yield.

  • Efficient capital reuse across Pathfinder architecture.

Dynamic Pool Sizing

The allocator adjusts pool size weekly (or more often) based on:

  • Transaction frequency and borrow size.

  • VIP fee caps and utilization thresholds.

  • Available synthetic capacity from Tier B/C.

Core Formulae:

Allocator Logic:

  1. Estimate weekly borrow demand.

  2. Target utilization (e.g., 75%).

  3. If per-borrow bps > cap, shrink pool to raise turnover.

  4. If per-borrow bps ≪ cap and utilization is low, grow pool.

  5. Maintain a coverage floor.

  6. Include synthetic capacity in available liquidity calculations.

User Fee Management

  • Fee Caps: Default ≤ 10 bps (goal: ≤ 5 bps for HNW/institutional).

  • VIP Rebates: Volume-based rebate tiers.

  • VIP Pool Participation: High-volume users can contribute capital to PLP for a larger LP yield share.

Example VIP Fee Schedule:

Tier
Monthly Borrow Volume
Fee (bps)
Rebate %
Effective Fee (bps)

Standard

$0–$5M

10

0%

10

Silver

$5–$25M

8

20%

6.4

Gold

$25M+

5

50%

2.5

LP Yield Composition

LP yield sources:

  1. Fee Yield: Instant liquidity fees × utilization × turnover.

  2. Portfolio Yield: Yield from Tier B/C collateral backing synthetic IOUs.

  3. Passive Yield: Yield on idle LP funds outside the PLP.

Risk Management

  • Liquidity Coverage Ratio (LCR): Weighted by unwind times.

  • Stress Testing: Model 3× peak draw and 2× tx/day spikes.

  • Synthetic IOU Limits: Max % of Tier B/C pledgable.

  • Circuit Breaker: Halt expansion if coverage risk exceeds threshold.

Monitoring & Telemetry

Allocator decisions are driven by:

  • Tx frequency distribution

  • Peak concurrent borrow % of weekly volume

  • Pool turnover

  • Per-borrow bps (raw & VIP effective)

  • LP yield actual vs. target

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