Redemption Mechanism

The RedemptionQueue contract manages the redemption process for veMetis tokens by utilizing a queue system represented through ERC721 NFTs. This ensures that redemptions are handled in an orderly and secure manner. This part provides an overview of the redemption flow, detailing the steps users take to redeem their veMetis for METIS, as well as additional functionalities available within the contract. Redemption Flow

The following outlines the user flow for redeeming veMetis tokens using the RedemptionQueue contract:

1. Entering the Redemption Queue

Function Involved

  • enterRedemptionQueue

Steps:

  1. Approval:

    • The user must first approve the RedemptionQueue contract to transfer the desired amount of veMetis tokens on their behalf. This can be done by calling the approve or permit function on the veMetis contract.

  2. Initiate Redemption:

    • The user calls the enterRedemptionQueue function, specifying the recipient address and the amount of veMetis they wish to redeem.

    • Example:

      redemptionQueue.enterRedemptionQueue(recipientAddress, amountToRedeem);

  3. Token Transfer & NFT Minting:

    • Upon successful execution, the specified amount of veMetis is transferred from the user to the RedemptionQueue contract.

    • An ERC721 NFT (veMetisRedemptionTicket) is minted to the recipient, representing their position in the redemption queue.

    • The NFT contains metadata such as the redemption amount, maturity timestamp, and associated fees.

  4. Event Emitted:

    • EnterRedemptionQueue event is emitted, detailing the NFT ID, sender, recipient, amount redeemed, fees, and maturity timestamp.

Outcome:

  • The user now holds an NFT that represents their claim to redeem veMetis for METIS after a specified maturity period.

2. Waiting for Maturity

Details:

  • Each redemption ticket NFT has a maturity timestamp.

  • The user must wait until the current block timestamp surpasses the maturity time to proceed with redemption.

3. Redeeming the NFT for METIS

Function Involved

  • redeemRedemptionTicketNft

Steps:

  1. Ensure Maturity:

    • The user verifies that the current time is past the maturity timestamp associated with their NFT.

  2. Initiate Redemption:

    • The user calls the redeemRedemptionTicketNft function, providing the NFT ID and the recipient address.

    • Example:

      redemptionQueue.redeemRedemptionTicketNft(nftId, recipientAddress);

  3. Burning & Token Transfer:

    • The NFT is burned, marking the redemption as completed.

    • The corresponding amount of METIS is transferred to the recipient.

  4. Event Emitted:

    • RedeemRedemptionTicketNft event is emitted, detailing the NFT ID, sender, recipient, and amount redeemed.

Outcome:

  • The user receives the specified amount of METIS tokens.

4. Optional: Canceling the Redemption

Function Involved

  • cancelRedemptionTicketNft

Steps:

  1. Initiate Cancellation:

    • Before the maturity timestamp, the user can choose to cancel their redemption by calling the cancelRedemptionTicketNft function with the NFT ID and recipient address.

    • Example:

      redemptionQueue.cancelRedemptionTicketNft(nftId, recipientAddress);

  2. Fee Assessment:

    • A cancellation fee (cancelRedemptionFee) is calculated based on the redemption amount.

    • The fee is deducted from the redeemed amount.

  3. Token Transfers & NFT Burning:

    • The remaining veMetis is transferred back to the user after deducting the fee.

    • The NFT is burned, marking the redemption as canceled.

  4. Event Emitted:

    • CancelRedemptionTicketNft event is emitted, detailing the NFT ID, sender, recipient, amount returned, and cancellation fee.

Outcome:

  • The user retrieves their veMetis minus the cancellation fee, and the redemption queue position is revoked.

5. Optional: Reducing Redemption Maturity

Function Involved

  • reduceRedemptionMaturity

Steps:

  1. Provide LP Tokens:

    • The user can reduce the waiting period (maturity) by providing Liquidity Provider (LP) tokens.

    • They must specify the NFT ID, LP token address, and the amount of LP tokens to lock.

  2. Initiate Reduction:

    • Call the reduceRedemptionMaturity function with the necessary parameters.

    • Example:

      redemptionQueue.reduceRedemptionMaturity(nftId, lpTokenAddress, lpAmount);

  3. Maturity Adjustment:

    • The maturity timestamp is reduced based on the provided LP tokens and predefined factors.

    • The LP tokens are locked in the contract until a specific lock maturity timestamp.

  4. Event Emitted:

    • ReduceRedemptionMaturity event is emitted, detailing the NFT ID, LP token details, reduced time, and new maturity timestamp.

Outcome:

  • The user can redeem their METIS earlier by locking up LP tokens, enhancing flexibility in managing their redemption.

6. Optional: Unlocking LP Tokens

Function Involved

  • unlockLpToken

Steps:

  1. Wait for LP Lock Maturity:

    • After reducing the maturity, the LP tokens are locked for a specified duration (reduceMaturityStakeSecs).

  2. Initiate Unlock:

    • Once the lock period has passed, the user can call the unlockLpToken function with their NFT ID.

    • Example:

      redemptionQueue.unlockLpToken(nftId);

  3. LP Token Transfer:

    • The locked LP tokens are transferred back to the user.

    • The NFT is burned if there are no remaining redemption claims.

  4. Event Emitted:

    • UnlockLpToken event is emitted, detailing the NFT ID and LP token details.

Outcome:

  • The user retrieves their locked LP tokens after the lock period, completing the reduced maturity process.

7. Collecting Redemption Fees

Function Involved

  • collectRedemptionFees

Steps:

  1. Initiate Collection:

    • Authorized roles (TimeLock or Admin) can call collectRedemptionFees to withdraw accrued redemption fees.

  2. Fee Transfer:

    • The specified fee amount is transferred to the protocol's treasury.

  3. Event Emitted:

    • CollectRedemptionFees event is emitted, detailing the recipient and the amount collected.

Outcome:

  • The protocol efficiently manages and collects fees generated from redemptions.

Summary of Events

  • EnterRedemptionQueue: Emitted when a user enters the redemption queue by minting an NFT.

  • RedeemRedemptionTicketNft: Emitted upon successful redemption of the NFT for METIS.

  • CancelRedemptionTicketNft: Emitted when a user cancels their redemption, detailing the fees incurred.

  • ReduceRedemptionMaturity: Emitted when a user reduces the redemption waiting period using LP tokens.

  • UnlockLpToken: Emitted when LP tokens are unlocked and returned to the user.

  • CollectRedemptionFees: Emitted when the protocol collects redemption fees.

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