How the protocol clears — epochs, creation and redemption, the in-kind escape hatch, the oracle band, and the limits that keep a thin pool from moving your NAV. Plain English, one governing figure per chapter.
Primary-market orders queue and execute as a batch once every 15 minutes. The Epoch Engine sums opposing flows and sends only the net basket delta to the DEX — a 10,000 USDG creation against an 8,000 USDG redemption moves the market by 2,000. Cost falls with the netted share, and a single order loses the predictability a sandwich needs.
The Minter mints Parcels against what the epoch actually bought — you receive exactly the share your money purchased, net of fee. Redemption runs the other way. Both are primary-market operations, priced at settlement, not at the moment you file.
Burn your Parcels and take a proportional slice of every constituent straight from custody — no oracle, no DEX, no pool liquidity, no slippage. It audits faster than a swap path, so it is the base primitive of V1 and stays lit even when everything price-dependent is paused. USDG redemption is built on top: the Redeemer hands you the basket and sells it in the next epoch.
Scheduled swaps get front-run, so Parcel corrects weights through flow instead. The Rebalancer publishes each epoch's basket skewed toward underweight names — creations buy more of the laggards, redemptions sell the mirror. The skew is capped at 20% of target weight per epoch and published before the epoch opens. Residual drift is only swept by swap when it exceeds 5 points for over 72 hours, in tranches of at most 1% NAV, at an unpublished random time.
The Oracle Adapter aggregates constituent prices every 5 minutes in session and bounds execution rather than driving the chart. One constituent silent past 15 minutes pauses the whole basket's swap path; the entire feed silent past 30 minutes closes the USDG primary market. In-kind redemption keeps working through both — no oracle state locks you into a position.
A thin-pool constituent is an attack vector: move one name's price, mint or redeem against the distorted NAV, move it back. The band catches the crude cases; caps close the rest. The swap path is limited to 0.5% NAV per epoch per address and 2% NAV per epoch in total, and any constituent with under 250,000 USDG of depth at 2% slippage is held to at most 10% weight. In-kind has no limits — it never touches a price.
Because a Lot physically holds the shares, splits, ticker changes, delistings and buyouts are routine operations. The Corporate Action Handler processes each by a pre-announced policy: splits re-count units and hold weight; ticker or wrapper changes migrate the address through the timelock; cash buyouts move the position to USDG and redistribute; delistings wind the weight down in 1% NAV tranches.
In V1 a team multisig operates the Custody Lot under a 48-hour timelock; pauses are instant, un-pausing waits 24 hours. Three guards bound the trust. The escape hatch opens permissionless in-kind redemption automatically — after a pause runs 7 days, after the multisig is silent 30 days, or after holders vote to wind a Lot down — and neither the multisig nor the timelock can switch it off.
Parcel charges the flow, not the balance. A 0.75%/yr streaming fee accrues per block against NAV for upkeep; a 0.10% base flow fee plus a 0.00–0.50% impact component prices each primary ticket by its size against pool depth; in-kind is a flat 0.05% with no impact; an instant mint adds 0.25pp to skip the queue. Staked $PRCL discounts the flow fee by tier.
Tokenised equities carry basis risk to the underlying exchange price, widening in thin liquidity and closed hours. V1 custody is a team multisig, disclosed and time-locked. Epoch timing means primary orders price at settlement, not on submission. The Backstop Module covers a NAV shortfall only up to 30% of staked value per event; a larger loss falls on Parcel holders.
This is the operating summary. Contract addresses and live custody balances are on the Transparency page; the token that runs the machinery is documented under $PRCL.