Flow of Funds

From Deposit to Redemption: How Your Capital Moves

Sova Prime provides a clear, auditable flow from Bitcoin deposit to yield generation and redemption — combining smart contract enforcement with institutional-grade execution.

Here’s how it works step by step.

1. Deposit Into Vault

You start by depositing BTC into a Sova Prime vault via your Web3 wallet.

• Deposits are secured by the Vault smart contract

• BTC is wrapped into sovaBTC for use on the Sova Chain

• In return, you receive spBTC, representing your share of the vault

2. Capital Allocation

Once confirmed on-chain, pooled BTC is allocated into market-neutral yield strategies via integrated execution partners.

• Strategies include basis trades, funding spreads, and cash-equivalent rotations

• Assets are deployed across diversified venues and custody setups

• Risk guardrails (leverage limits, diversification policies, circuit breakers) are automatically enforced

Regulatory Alignment When applicable (PrimeX vaults), assets are routed through qualified custodians and compliant intermediaries.

3. Investment Execution

Execution is handled by a Yield Curator or equivalent strategy operator. They:

• Allocate BTC into the targeted financial strategies

• Manage portfolio exposure, hedging, and reporting

• Ensure custody and operational security through partners such as Fireblocks, BNY Mellon, or equivalent

4. On-Chain NAV Reporting

As the portfolio earns yield:

• The vault’s Net Asset Value (NAV) is updated periodically

• The Reporter contract posts updated NAV data directly on-chain

• Your spBTC token automatically reflects the higher value

Key Insight Your spBTC balance stays constant — but its redemption value in BTC terms increases over time as yield accrues.

5. Redemption & Settlement

When you choose to exit, the process is seamless:

1. Request Submission – You initiate a redemption in the Sova Prime interface

2. Queue Processing – Requests are batched and executed at the next settlement cycle

3. Asset Unwind – Strategies are unwound and BTC is returned to the vault

4. Token Burn – Your spBTC is burned against the vault

5. BTC Payout – You receive sovaBTC, which can be bridged back to native BTC

Liquidity Timing

• Core Prime strategies are designed to provide fast redemptions (typically T+1–3)

• Some strategies (PrimeX or specialized vaults) may require longer windows, depending on underlying assets

In summary: Deposit BTC → Mint spBTC → Earn yield → Redeem back to BTC. Every step is transparent, auditable, and secured by smart contracts, with institutional-grade strategy execution.