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The Authorized Participant

The Authorized Participant (AP) is the quoting and policy boundary between external users, product capacity, and the vault. The term is borrowed from the ETF industry, but in PMF the AP produces signed, noncustodial instructions that the vault can verify independently.

The AP role is currently handled internally. Over time it may expand to a whitelisted group of APs that manage separate distribution channels.

Role In The Flow​

The AP translates a requested product action into a bounded instruction the vault can independently verify. The AP checks product state, policy state, signer authority, settlement asset support, and capacity before producing a quote.

The AP does not custody user funds, submit user transactions, or override vault rules. Its authority is limited to signed quotes that expire quickly and apply to the exact action described in the quote.

Quote Parameters​

AP quotes make four operational decisions visible:

  • Price: The AP reconciles current NAV, current market data, spreads, and the last quoted value before signing.
  • Capacity: The AP limits order flow when the vault would otherwise hold too much unallocated capital, exceed supply controls, or overwhelm market liquidity.
  • Policy: The AP can block accounts, jurisdictions, products, or routes that are not eligible for quote creation.
  • Authority: The AP signer authorizes one exact vault action with a quote ID, nonce, deadline, receiver, settlement asset, and output bounds.

User Transaction Boundary​

A quote can include the wallet calls needed to complete the action. For a buy, the frontend may first ask the wallet to approve pUSD and then submit depositWithAPQuote. For a sell, it submits requestRedeemWithAPQuote.

The quote ID and nonce are single-use replay keys. If the quote expires, is already used, targets the wrong wallet, or does not match the vault action, the vault rejects it.

Direct and Distributed Sales​

Currently, direct vault minting and redemption for each order is managed by the AP. Over time, an AP may also mint and redeem with its own capital to sell to traders on the open market. That model can support a smoother trader experience and better price discovery.

Fail-Closed Operation​

Production quote creation should fail closed when required gates are unhealthy. Those gates include AP signer readiness, approved policy version, routing, capacity, supply caps, NAV freshness, holdings scans, reconciliation, daily volume controls, and live market pricing.