Net Zero Flow

The net zero flow occurs when a deposit intent and a withdrawal intent are resolved together and their amounts are close enough that no bridge loan is needed. Instead of going through a Request contract, the protocol simply adjusts the Position Manager slightly and swaps tokens directly between the two intents.

Lifecycle

sequenceDiagram
    participant D as Depositors
    participant W as Withdrawers
    participant FD as Deposit Intent
    participant FW as Withdrawal Intent
    participant PM as Position Manager

    D->>FD: 1a. Deposit USDC
    FD-->>D: ERC-6909 LP tokens
    W->>FW: 1b. Deposit PM shares
    FW-->>W: ERC-6909 LP tokens

    Note over FD,FW: 2. Facilitator locks both intents

    alt More withdrawals than deposits
        FD->>PM: 3. Repay small debt amount
    else More deposits than withdrawals
        FD->>PM: 3. Borrow small additional amount
    end

    FD->>FW: 4. Swap USDC for PM shares
    FW->>FD: PM shares

    Note over FD,FW: 5. Both intents resolved
    D->>FD: Claim PM shares
    W->>FW: Claim USDC

How It Works

When deposit and withdrawal volumes are nearly equal, the protocol skips the bridge loan entirely:

1. Deposit phase — Users deposit capital (e.g., USDC) into the deposit intent. Separately, withdrawers deposit PM shares into the withdrawal intent
2. Lock — The facilitator locks both intents and begins resolution
3. Position Manager adjustment — A small adjustment is made to the Position Manager to keep it near its target LTV:
   • If there are slightly more withdrawals than deposits, a small amount of debt is repaid using depositor funds to bring the LTV down
   • If there are slightly more deposits than withdrawals, a small amount is borrowed against the existing position to bring the LTV up
4. Swap — The two intents swap tokens directly: USDC goes to the withdrawal intent, PM shares go to the deposit intent
5. Resolution — Both intents are resolved. Deposit LP holders claim PM shares, withdrawal LP holders claim USDC

When Net Zero Applies

Whether the flow qualifies as net zero depends on:

• Volume relative to TVL — the smaller the deposit/withdrawal volume compared to the total position size, the less impact on LTV and the more likely it can be handled without a bridge loan
• Current LTV — if the Position Manager is already close to its target, a small imbalance between deposits and withdrawals can be absorbed with a minor adjustment rather than a full bridge loan cycle

When the imbalance is too large to absorb through a small Position Manager adjustment, the flow falls back to a net deposit or net withdrawal flow instead.

Cost Advantage

Because no bridge loan is involved, the net zero flow has no bridge facilitator fees. This makes it the cheapest way to enter or exit a position — both depositors and withdrawers avoid the cost of a Request contract entirely.