# Open design questions

**Update:** See [confirmed design decisions](design-decisions.md) for the November 6 questionnaire answers. Those decisions supersede the corresponding unanswered items below; the original questions and inline responses are retained as review history.

## Backing and external redemption

- Are special-minted tokens fully fungible with ordinary LiqETH/LiqSOL, including redemption and reward rights? Yes
- How does Liq recognize AMM-controlled assets as backing without double counting assets and token claims? it doesn't change, only a new mint function will be added to Liq and only this contract will be able to call it. Withdrawl will be put behind a proxy
- When a trader takes LIQ out of the AMM and redeems through Liq, who supplies the native asset and how does the AMM liability change? see latest diagram
- Can Liq draw backing directly from the AMM, or does redemption create a payable? How does either route affect reserves and the AMM curve?
- How are settled claims prevented from being paid or cancelled twice?

## Multiple LPs and ownership

- How is a later native-only deposit priced when reserves are imbalanced?
- Does special minting always match the native contribution 1:1, or follow a different rule after initial bootstrap?
- Are liabilities pooled pro rata or tracked per position?
- How do partial exits, share transfers, position splits and additional deposits carry liability and accrued charges?
- Are LP interests fungible tokens or position-specific records?

## Yield-support payment

- Is the charge assessed on total special issuance, net circulating exposure or another base?
- Is 2.8% a fixed rate, an example or a dynamic benchmark? APR or compounded APY?
- Do swap fees fund it, and what happens when fees are insufficient?
- Does pool-held LIQ earn rewards? Who receives those rewards, and how are internal flows netted?
- How are accrual, settlement cadence, missed cranks and arrears handled on each chain?

## Curve and settlement

- Is the swap invariant ordinary constant product or a specialized native/LIQ curve?
- Is 1:1 conversion a principal accounting rule or an enforceable immediate redemption rate? How are reward indices and losses handled?
- What additional equity/reserve buffer is required beyond E + L >= D?
- How are reserve changes caused by payments and redemption settlement reflected in curve accounting?
- Can withdrawals return both assets, as illustrated, or must native-only exit also be supported?

## Chain-specific implementation

- Ethereum: native ETH versus WETH reserve interface; permitted mint/burn and backing-transfer entrypoints; reward/accounting integration.
- Solana: SOL versus wrapped SOL interface; authorized mint PDA, share accounting, transfer-hook accounts, reward treatment and withdrawal-receipt integration.
- Both: atomic mint/liability creation, settlement-before-release, rounding direction, callback/reentrancy behavior and transaction failure rollback.

## Next examples to draw and simulate

1. External LIQ redemption while its special-mint liability remains open.
2. A second LP depositing into a 150 ETH / 75 LiqETH pool.
3. Partial withdrawal followed by LP-position transfer.
4. Fees insufficient to meet accrued yield-support payments.
5. Last LP exit with LIQ still circulating outside the pool.