> For the complete documentation index, see [llms.txt](https://sovavault.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sovavault.gitbook.io/docs/sova-for-users/flow-of-funds.md).

# Flow of Funds

## From Deposit to Redemption: How Your Capital Moves

Sova provides a **clear, auditable path** from crypto deposit to off-chain investment and back - combining smart contract enforcement with institutional-grade execution.

*Here's what happens behind the scenes.*

***

### 1. Deposit Into Vault

You begin by depositing **BTC or USDC** into a Sova vault via your wallet.

* Funds are held in a **smart contract queue**
* If you're depositing BTC, it's converted into USDC via a regulated partner
* All assets are secured by **Sova's Conduit contract**, which safely manages custody handoff

***

### 2. Off-Chain Transfer & Fiat Conversion

Once deposits are confirmed:

* USDC is transferred to a **licensed Yield Curator**
* Crypto is off-ramped into fiat through regulated entities (e.g. Circle)
* The funds are now in a position to be deployed into real-world investments

> 🏛️ **Regulatory Compliance**
>
> All fiat movement occurs through **regulated banks, custodians, or brokers**, depending on the strategy.

***

### 3. Investment Execution by the Yield Curator

The Yield Curator executes the strategy using the capital received:

* **Allocates** into financial instruments (e.g. treasuries, corporate loans, ETFs)
* **Manages** portfolio construction, risk, and reporting
* **Holds assets** in custody with institutions like BNY Mellon, Fireblocks, etc.

***

### 4. On-Chain NAV Reporting

As the portfolio earns yield or appreciates:

* The **NAV (Net Asset Value)** of the strategy is updated periodically
* Sova's **Reporter contract** posts the new valuation to the vault on-chain
* Your tRWA token now reflects the new, higher value

> 💡 **Key Insight**
>
> Your token balance stays the same, but the **redeemable value increases** over time.

***

### 5. Redemption & Settlement

When you choose to exit:

#### Step-by-Step Process:

**1. Request Submission**

You submit a **withdrawal request** in the Sova app

**2. Queue Processing**

Your request is queued and processed at the next **redemption window**

**3. Asset Liquidation**

The Yield Curator liquidates assets and returns fiat to the on-ramp partner

**4. Crypto Conversion**

Fiat is converted back to USDC (or BTC, if applicable)

**5. Token Burn & Payout**

You **burn your tRWA token** and receive your crypto

> ⏱️ **Timing Varies by Strategy**
>
> Some strategies offer quicker liquidity (e.g. within **1–3 days**), while others may have longer cycles (up to **30+ days**) depending on the underlying assets.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://sovavault.gitbook.io/docs/sova-for-users/flow-of-funds.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.