NAOS maintains a cash reserve (“cash drag”) in the Index Pool to provide liquidity for withdrawal. Lenders may access liquidity from the Index Pool at any time. When the withdrawal demand exceeds the reserve amount, a queuing system is in place for lenders to indicate the desired withdrawal amounts.
Each lender may only submit one request at a time, it may be the full or partial invested capital, and is able to adjust ("update") the withdrawal amount or cancel redemption ("cancel") prior to distribution.
For example, a lender supplied $10K in the borrowing pool and is redeeming $5K. A $10K reserve allows the lender to receive the redeemed amount in full.
However, if there is only $3K in the reserve, the lender will be able to redeem $3K immediately, and be in queue for the remaining $2K. Once the remaining $2K is redeemed, the lender will need to submit another withdrawal request for the remaining amount.
Following the above example, if a 2nd lender requests for withdrawal for $5K, the 2nd lender will be in queue until the first lender has fully redeemed $5K, and be the first in-line for the next $5K interest payment or when new capital entering the pool.