How Sazare works.

Follow the assets

• FairLaunch creates a fixed-supply token and its market. The market vault accounts for floor reserves, trading assets and fees separately.
• The volatility warehouse manages the market’s trading inventory. Its perps warehouse provides that market’s coverage and short inventory.
• A settlement pool supplies settlement-asset principal to admitted credit and perps engines. Within a release, markets using the same settlement asset share this pool.
• Borrowing income, home-market premiums and released capital follow different routes. Buybacks purchase and burn the relevant launched token—not the settlement asset.

Shared liquidity is not a public savings account

Settlement pools are funded by participating warehouses. They are not conventional user deposit vaults with freely transferable LP shares. Borrowers interact with the credit or perps engine; the pool handles principal and funding accounting underneath.

Availability depends on an approved launch origin, a correctly installed contract graph, settlement-asset admission, and—for perps—qualified execution venues and sufficient local coverage. Launching a token does not automatically make every finance operation available.

From configuration to trading

A successful launch creates the token and its market contracts, seeds the floor, and bootstraps locked Uniswap V4 liquidity atomically. The old issuance curve is not part of new FairLaunch markets. Initial supply is chosen at launch; one billion is an example, not a universal requirement.

Creator-selected trading fees are fixed for the market. Indexes and creator profiles help discover markets, but contract bindings and onchain ownership—not profile text—determine which market and owner an action targets.

Optional team allocation

The new factory implementation supports allocating up to 20% of initial supply to an immutable team beneficiary. Those tokens go to a dedicated vesting contract, not directly to an immediately spendable team wallet. The remainder is available for launch liquidity; rounding dust stays in the vault.

Nothing vests during the first 30 days. Vesting then proceeds linearly for 60 days: half of the allocation is vested at day 60, and all of it at day 90. Anyone may trigger release, but tokens always go to the fixed beneficiary. There is no early withdrawal, revocation or beneficiary-change function.

Vesting tokens count in outstanding supply and floor backing from launch. They are not excluded to inflate the displayed floor. A 10% allocation on a one-billion-token launch therefore sends 100 million tokens to vesting and makes 900 million available for liquidity.

Before submitting

• Check the settlement asset and token amounts; a floor in WETH is not a guaranteed dollar value.
• Check the SZR burn quote, creator fee, team percentage and beneficiary before signing. The team schedule cannot be corrected later.
• Use a factory version that supports the chosen configuration. Visible preview controls are not proof that an older deployed factory supports vesting.

What the floor means

The core backing relationship is floor reserve divided by backed supply. Actual executable quotes also account for integer rounding, supported price representation and terminal-unit preservation. Use the contract’s redemption quote rather than multiplying a rounded display price.

Floor realization burns launched tokens while releasing the corresponding settlement backing. When recovery uses the floor, it uses current accounted floor value, not a floor price frozen when the position opened. This is a recovery mechanism—not the default for healthy repayments or profitable closes.

The floor is denominated in its settlement asset. It does not guarantee a fiat price, unlimited external-market liquidity, or that every outside venue always quotes above it.

The volatility warehouse

The warehouse adjusts its trading response to market conditions and available inventory. Realized revenue is attributed among the floor, standard warehouse and connected finance components according to the market’s rules. A larger warehouse is not a promise of unlimited leverage: existing obligations still reserve capital.

Permissionless accounting and fee-routing calls move assets to fixed destinations. Permissionless execution does not let the caller choose where protocol reserves go.

Adding backing

The current MarketVault supports donateSettlementToFloor: an explicit settlement-token donation that increases accounted floor backing. It is not a loan or an LP deposit and creates no right to withdraw the donation. Do not substitute a direct token transfer and assume it will be credited to the intended bucket.

Long and short

A long borrows settlement principal and executes a token purchase. Its protection includes launched-token collateral, current executable floor backing and reserved home-warehouse coverage.

A short uses launched-token inventory from its home warehouse and executes a sale. The position tracks the token-return obligation, settlement reserves and warehouse accounting. Closing by buying tokens back is allowed when execution and the remaining obligations permit it; a stale quote must fail and be refreshed rather than silently switch to another settlement method.

One live position per direction

Within a market’s engine, a wallet has at most one active long and one active short. Increasing an existing position keeps its live position ID and unified funding/recovery lifecycle. A long and short remain separate; there is no automatic netting or cross-market margin.

Increases must reconcile earned funding and satisfy the combined position’s collateral and coverage checks. Reductions release only what is no longer required. Positions use a blended obligation after increases rather than user-selectable historical lots.

Coverage and the chord

The chord is the contract’s constraint on which combinations of token and settlement reserves can secure the remaining debt. Meeting a displayed leverage target is not enough: every increase, reduction and recovery slice must preserve the applicable obligations.

Floor appreciation can reduce a long’s required warehouse coverage at unchanged debt and collateral. Releasing that coverage still requires all safety checks to pass and cannot erase earned fees. Taking more debt may require more coverage. Short inventory and obligations follow their own accounting; a higher floor does not automatically free short reserves.

Opening and closing

Review the quoted exposure, expected leverage, opening fee, prepaid pool funding and home premium separately. Keep funding available to maintain the position. A healthy owner exit repays or buys back what is owed and returns the owner’s remainder; it does not default to burning collateral through the floor.

Some refunds and surplus are recorded as owner claims and require a separate claim transaction. A completed position does not erase those claims.

Manage an existing loan

The current credit engine supports adding collateral and drawing additional debt on an existing eligible loan. More collateral does not automatically borrow more: an additional draw is a separate checked action. A rise in executable floor backing can also create borrowing room, subject to the engine’s checks and pool liquidity.

Collateral top-ups do not pay unpaid funding or reset the grace clock. They cannot revive a loan after effective grace expiry or recovery has begun. Independently opened credit loans are not automatically merged into one position.

Repayment and refunds

There is no credit opening fee. Pool funding must still be paid. A healthy borrower repays the required settlement debt and any earned unpaid funding to recover collateral; this path does not need a floor burn.

Partial repayments and recovery fills reduce recorded debt, so an amount already repaid is not charged again. Once obligations are satisfied, unsold collateral and surplus belong to the borrower. Unused refundable funding may need a claim transaction.

Canonical SZR credit is a separate path

The flagship SZR market has a dedicated canonical credit engine. Its capacity is capped at 90% of net executable floor value, excluding the terminal unit and accounting for the flagship’s 1% selling fee. The old aggregate 50 WETH exposure limit is not part of the current model.

Canonical recovery sells through the flagship market in bounded hourly slices rather than using the ordinary FairLaunch floor path. It can take up to 64 slices. This affects capital-recycling speed; it is not a promise of immediate liquidation or an executor reward. Do not send canonical SZR through an arbitrary per-market credit engine.

The lifecycle

• Funded: the deposited balance pays the applicable funding obligations.
• Grace: begins at effective funding exhaustion. Restoring funding requires paying the unpaid time as well as supplying what is needed going forward. Closing or fully repaying also requires earned arrears before collateral is released.
• Recovery: begins at effective grace expiry. Funding is frozen at that boundary; delayed keeper activity does not move the economic start time.
• Settlement: recovery proceeds pay the outstanding obligations. Only what is still owed is collected; remaining collateral and owner surplus are returned or made claimable.

Auctions do not wait for a start transaction

Ordinary credit and perps auction windows are derived from grace expiry and run for 24 hours. A separate start transaction is not required to establish the window. Blockchains do not wake themselves up, however: auction fills, checkpoints and fallback execution still need submitted transactions.

Forward credit/long auctions use a deterministic schedule starting at 256 times current floor value and descending toward the floor over the window. This is not the earlier proposed 3× spot-price design. A changing live floor can change the quote; bidders must use fresh onchain quotes and payment limits.

Short recovery is a reverse auction: it offers increasing settlement payment for the launched tokens needed to discharge the short. Payment is bounded by available resources and the short’s chord, not an unrestricted bid at any price.

If the auction does not fill

Eligible credit/long collateral can fall back to current-floor realization after the auction window. Short recovery uses its permitted settlement discharge and coverage mechanics; it cannot simply burn tokens it does not hold. Canonical SZR credit retains its separate market-sale recovery schedule.

Recovery is debt-first, not a forfeiture of everything the user deposited. If only part of the collateral is needed, the remaining portion still belongs to the owner. Any excess settlement after principal and earned obligations is also the owner’s. Settlement assets are not burned.

Fees are separate charges

• FairLaunch spot fees: 35 bps to the protocol, 30 bps to the floor, plus a creator-selected fee from 0 to 235 bps. These fixed allocations total 65–300 bps; warehouse spreads and execution price impact are separate.
• Perps opening charge: 5 bps of borrowed settlement for longs, or executed settlement sale proceeds for shorts. It splits 25% to the protocol and 75% to the home warehouse, not the shared-pool contributor index. Increases charge the added opening notional rather than recharging the whole position.
• Credit opening charge: zero. Funding is not free.
• Shared pool earnings: the protocol share is 25%; the remaining contributor earnings are allocated to participating warehouses through the contributor accounting. This is not an equal payment to every token.
• Home inventory/coverage premiums: gross earned premiums split 25% to the protocol and 75% to the position’s home warehouse. That home portion is not shared across other warehouses. Net home premiums and claimed pool contributor earnings fund the market’s own-token buyback-and-burn budget.

Utilization-sensitive funding

Pool pricing uses a Morpho-style, time-weighted adaptive target with a 90% utilization kink. It is a bounded additive adaptation, not an exact copy of Morpho’s implementation. Rates rise more steeply above the kink and are bounded by the release’s configured limits.

Opening and additional-draw quotes account for the utilization interval the borrow consumes, rather than charging the whole amount at the displayed starting rate. Epoch pricing and prepaid commitments determine what is actually owed. APR is an annualized rate, not a guaranteed APY or a fixed lifetime cost.

SZR is not a claim on every reserve

Canonical FairLaunch requires its configured SZR burn, reducing flagship supply through the accounting-aware burn path. Future approved factory families may use different launch policies; admission alone does not prove that they require a burn.

A launched market’s buybacks burn its own token. Protocol fees go to the configured fee beneficiary; further treasury buybacks or team distributions require that recipient’s separate policy and execution. Holding SZR does not itself grant withdrawal rights over other markets’ floors, collateral or shared pool principal.

Qualification, then gradual release

Both the trailing 30-day average and current utilization must be below 50%. Qualifying daily releases remove 7.39% of eligible excess—the idle principal above what is needed to keep utilization at 50%. With sustained eligibility and otherwise unchanged conditions, that is approximately 90% over another 30 days. It is not a promise to release 90% of the entire pool within 30 days of deposit.

New borrowing, changing utilization and outstanding obligations can change eligibility and the amount released. Allocations follow warehouse contributor accounting; a caller cannot redirect another warehouse’s release.

Market-price buybacks

Released capital is routed to the market’s fixed buyback scheduler for paced purchases and token burns. Execution is permissionless and uses market price with enforced pacing and slippage limits—not a ceiling of floor plus 5%.

The current scheduler uses hourly windows, a 1% hourly budget and a 20% rolling-day limit under its budget accounting, plus a 5% marginal price-movement limit and a separate fee allowance. Actual execution can be smaller or deferred when price movement, liquidity or remaining budget prevents a valid slice. Permissionless does not mean every call must trade.

Time-slicing reduces the size of individual purchases; it does not eliminate MEV or guarantee an execution price. Settlement that cannot be spent under the rules remains accounted for rather than being burned.