Liquidity
How to identify liquidity mismatch
A vault that promises faster exit than its assets can deliver.
- 01Share looks instant
- 02Assets are locked
- 03Queue
- 04Someone waits
The failure mode
Liquidity mismatch is a vault that lets people believe they can leave faster than the underlying positions can be unwound. Lending markets at high utilisation, staking exit queues, asynchronous RWA redemptions and basis trades all do this in different ways.
How it shows up
The interface still has a withdraw button. The transaction reverts, queues, or fills a fraction. ERC-7540 at least names the request. A vault that pretends to be instant while its assets are not is the more dangerous design.
What to compare
Withdrawal class, lock-ups, cooldowns, and whether the strategy’s slowest sleeve sets the exit. The slowest sleeve wins.
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