Creation and Redemption

PMF primary flow uses AP quotes. Traders do not use ordinary unrestricted mint and redeem paths while the product is operating through the AP quote model.

Creation Flow

1. A trader requests a creation quote for a product and amount.
2. The AP evaluates eligibility, NAV state, capacity, policy controls, and market conditions.
3. If the flow is supportable, the AP returns a short-lived signed quote.
4. The trader submits the vault transaction with the quoted authorization.
5. The vault verifies the signature, deadline, replay protection, receiver, settlement asset, and accounting bounds.
6. If all checks pass, the vault accepts settlement asset and mints shares under the quote terms.

Redemption Flow

1. A holder requests a redemption quote for a product and share amount.
2. The AP evaluates the same product, NAV, capacity, policy, and settlement conditions.
3. If supportable, the AP signs a redemption quote with exact terms.
4. The holder submits the vault transaction with the quote.
5. The vault verifies the quote and burns or removes shares according to vault rules.
6. The vault records or pays the settlement asset obligation according to available pUSD and the product state.

Failure Modes

If checks fail, the quote is unavailable or the transaction reverts. Expected failure reasons include expired quotes, replayed quote IDs, mismatched receiver, unsupported settlement asset, stale NAV, insufficient capacity, unreconciled holdings, or product controls that block the requested route.

Quote refusal protects existing shareholders from stale marks and adverse selection. It should be treated as part of the operating model.