> ## Documentation Index
> Fetch the complete documentation index at: https://docs.cargotrading.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Auction and Redemption Contracts

> How the Genesis curve, the sealed batch auction and the creation and redemption flows work on-chain in every Cargo vault, with the Genesis Vault's parameters.

Cargo vaults have no yield strategy contract. Capital is not deployed by code; it buys shares that are already backed by receipted goods. The on-chain logic that matters is how shares are sold and how they come back. The same contracts run every vault; each vault sets its own parameters, shown here for the Genesis Vault (cvCOCOA).

## Genesis Curve

A primary sale by the Vault SPV on a linear price curve from a start price P₀ to an end price P₁ over the cap C:

```text theme={null}
P(R) = P₀ + (P₁ − P₀) × R / C                    R = USDC raised so far
Shares for a ticket D = (1/b) × ln( P(R + D) / P(R) ),   b = (P₁ − P₀) / C
```

**Genesis Vault Parameters:** P₀ = 4.793, P₁ = 5.118, C = 1,500,000, so b = 0.325 / 1,500,000.

Each ticket pays the average price across its slice of the curve, so splitting a ticket gives exactly the same number of shares. Fills are ordered by time, the priority window first. Below the minimum (\$500,000 in the Genesis Vault), all USDC is refunded.

## Batch Auction

| Step | Rule |
| :- | :- |
| Seller | The Vault SPV only, against newly receipted lots |
| Bids | Sealed limit bids (price, quantity), minimum \$5,000, editable until clearing |
| Clearing | At a fixed interval (every 12 days in the Genesis Vault) at 12:00 UTC; uniform price at the lowest winning bid; pro rata at the margin |
| Settlement | Atomic: USDC against shares |
| Fees | 0.25% each side; panel market makers fee-free |
| Tape | Clearing price, discount to NAV, volume, bid-to-cover and lot IDs, emitted at clearing |
| Errors | Reversed only for system error, within one hour of clearing |

## Creation and Redemption

| Flow | Who | Price | Settlement |
| :- | :- | :- | :- |
| Creation | Authorised participants | NAV + 0.10% | In blocks (1,000 shares in the Genesis Vault), any business day, T+1 in USDC |
| Redemption | Any holder above the vault minimum (1,000 shares in the Genesis Vault) | NAV − 0.10% | Requested until 24 h before a batch; struck at the batch; paid within 12 days in the Genesis Vault |

## Safeguards

> [!WARNING]
>
> Creations and redemptions pause when the NAV fallback triggers. Minting stops if the collateral-manager report is stale or a lot shows a discrepancy above 0.5%. Every contract that mints, auctions or holds value will be audited before mainnet; no audit has been completed yet.


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