Capital Lifecycle

Overview

Capital in Upside follows a defined lifecycle from depositDepositThe action of investing collateral into a raise. The raise contract receives collateral, routes it to the yield strategy, and mints a pFT position NFT. A live oracle price feed determines USD notional for FT allocation via deposit-time conversion. through yieldYieldReturns generated by the yield strategy on deposited collateral. Variable, not guaranteed. Distributed via the yield waterfall: platform fee (10%) to DAO, then net yield (90%) to the project. generation to exit. The sections below show how principal protectionPrincipal ProtectionStructural guarantee that investors can always redeem their deposited collateral via the perpetual PUT. Proportional to reserve backing, not a fixed dollar guarantee., yieldYieldReturns generated by the yield strategy on deposited collateral. Variable, not guaranteed. Distributed via the yield waterfall: platform fee (10%) to DAO, then net yield (90%) to the project. routing, and optional buyback and burnBuyback and BurnOptional mechanism where released capital from withdraws and yield surplus can be used to buy back and burn project tokens, reducing circulating supply. Enabled by the raise creator at raise creation. connect.

Deposit to Strategy

When an investor depositsDepositThe action of investing collateral into a raise. The raise contract receives collateral, routes it to the yield strategy, and mints a pFT position NFT. A live oracle price feed determines USD notional for FT allocation via deposit-time conversion. collateralCollateralThe asset an investor deposits into a raise (e.g., USDC, WETH). Each accepted collateral type runs in an isolated pool with independent reserve accounting. Active collateral routes to the yield strategy and backs investor principal protection.:

1. CollateralCollateralThe asset an investor deposits into a raise (e.g., USDC, WETH). Each accepted collateral type runs in an isolated pool with independent reserve accounting. Active collateral routes to the yield strategy and backs investor principal protection. is received by the raise contract
2. Capital is routed to the yield strategyYield StrategyProtocol used to generate yield on deposited capital. Aave V3 is the only supported strategy at launch. Yield funds the platform fee and the project ecosystem budget. If buyback is enabled, yield surplus can also fund buyback and burn. (Aave V3 at launch)
3. A pFTpFTERC-721 position token representing an investor's position. Stores collateral token, amounts, FT(fundraising token) allocation, and strike/oracle context. Transferable as any standard NFT. position NFT is minted recording the depositDepositThe action of investing collateral into a raise. The raise contract receives collateral, routes it to the yield strategy, and mints a pFT position NFT. A live oracle price feed determines USD notional for FT allocation via deposit-time conversion. details
4. Capital immediately begins earning yieldYieldReturns generated by the yield strategy on deposited collateral. Variable, not guaranteed. Distributed via the yield waterfall: platform fee (10%) to DAO, then net yield (90%) to the project. in the strategy

All depositedDepositThe action of investing collateral into a raise. The raise contract receives collateral, routes it to the yield strategy, and mints a pFT position NFT. A live oracle price feed determines USD notional for FT allocation via deposit-time conversion. capital is put to work. There is no idle reserveReserveThe pool of collateral backing investor positions in a raise. Under normal conditions, each investor's proportional share equals their original deposit. In a shortfall, proportional settlement distributes what remains fairly. Reserve accounting is per-raise (isolated)..

Yield Generation and Distribution

Strategy yieldYieldReturns generated by the yield strategy on deposited collateral. Variable, not guaranteed. Distributed via the yield waterfall: platform fee (10%) to DAO, then net yield (90%) to the project. follows a waterfallYield WaterfallDistribution order of gross strategy yield: platform fee (10%) to DAO, then net yield (90%) to the project for ecosystem budget and optional buyback and burn.. The platform feePlatform FeePercentage of yield taken by the platform (10% at launch), allocated to the DAO. No fee on core user actions (deposit, redeem, withdraw). is deducted first:

Gross Strategy Yield

Total yield generated by deployed capital

10%

Platform Fee

DAO treasury

90%

Net Yield

Project allocation

Ecosystem Budget

Primary use of net yield

Optional

Buyback & Burn

Funded from excess ecosystem budget

See Fees and Economics for the fee breakdown.

Project-side routing between ecosystem budget and optional buybackBuyback and BurnOptional mechanism where released capital from withdraws and yield surplus can be used to buy back and burn project tokens, reducing circulating supply. Enabled by the raise creator at raise creation./burn is set by the raise creator at raise creation. Claiming is permissionless: anyone can trigger the yieldYieldReturns generated by the yield strategy on deposited collateral. Variable, not guaranteed. Distributed via the yield waterfall: platform fee (10%) to DAO, then net yield (90%) to the project. claim function. Claim cadence can be daily, weekly, or threshold-driven.

Exit Paths and Capital Effects

Redeem (exercise PUT)

When an investor redeemsRedeemExercise principal protection and exit to collateral. Implemented by the divest contract function. Permissionless and on-chain.:

• CollateralCollateralThe asset an investor deposits into a raise (e.g., USDC, WETH). Each accepted collateral type runs in an isolated pool with independent reserve accounting. Active collateral routes to the yield strategy and backs investor principal protection. is partially or fully withdrawnWithdrawClaim project tokens and forfeit principal protection on the withdrawn amount. Implemented by withdrawFT. Requires transferable to be enabled. Released capital moves to capitalDivesting for optional buyback and burn (if configured). from the strategy
• CollateralCollateralThe asset an investor deposits into a raise (e.g., USDC, WETH). Each accepted collateral type runs in an isolated pool with independent reserve accounting. Active collateral routes to the yield strategy and backs investor principal protection. is returned directly to the investor
• The position’s FTFT (Fundraising Token)The project's token being sold in a raise. Investors receive fundraising token allocation at deposit time, which they can later withdraw to claim the FT tokens. allocation is released back to the available pool
• collateralSupplyCollateral SupplyState variable (collateralSupply[token]) tracking active backing collateral per token type. Increases on deposit, decreases on redeem. decreases

Capital leaves the system entirely.

Withdraw (claim FT)

When an investor withdrawsWithdrawClaim project tokens and forfeit principal protection on the withdrawn amount. Implemented by withdrawFT. Requires transferable to be enabled. Released capital moves to capitalDivesting for optional buyback and burn (if configured). FTFT (Fundraising Token)The project's token being sold in a raise. Investors receive fundraising token allocation at deposit time, which they can later withdraw to claim the FT tokens.:

• FTFT (Fundraising Token)The project's token being sold in a raise. Investors receive fundraising token allocation at deposit time, which they can later withdraw to claim the FT tokens. tokens are transferred to the investor
• The equivalent collateralCollateralThe asset an investor deposits into a raise (e.g., USDC, WETH). Each accepted collateral type runs in an isolated pool with independent reserve accounting. Active collateral routes to the yield strategy and backs investor principal protection. is tracked under capitalDivesting[token]Capital DivestingState variable (capitalDivesting[token]) tracking released collateral available for the project to pull for buyback and burn operations (if enabled). Increases when investors withdraw FT.
• CollateralCollateralThe asset an investor deposits into a raise (e.g., USDC, WETH). Each accepted collateral type runs in an isolated pool with independent reserve accounting. Active collateral routes to the yield strategy and backs investor principal protection. remains in the strategy until admin pulls it for buybackBuyback and BurnOptional mechanism where released capital from withdraws and yield surplus can be used to buy back and burn project tokens, reducing circulating supply. Enabled by the raise creator at raise creation./burn (if configured)

Capital transitions from active backing to divestingCapital DivestingState variable (capitalDivesting[token]) tracking released collateral available for the project to pull for buyback and burn operations (if enabled). Increases when investors withdraw FT. state.

Buyback and Burn (Optional)

When enabled by the raise creator, two sources feed buyback and burnBuyback and BurnOptional mechanism where released capital from withdraws and yield surplus can be used to buy back and burn project tokens, reducing circulating supply. Enabled by the raise creator at raise creation. operations:

1 Yield surplus

Allocated to buyback by the raise creator’s configuration

2 Released capital

From exits via withdraw (capitalDivesting)

How exits via withdraw fund buyback (when enabled)

When investors claim FTFT (Fundraising Token)The project's token being sold in a raise. Investors receive fundraising token allocation at deposit time, which they can later withdraw to claim the FT tokens. (exit via withdrawWithdrawClaim project tokens and forfeit principal protection on the withdrawn amount. Implemented by withdrawFT. Requires transferable to be enabled. Released capital moves to capitalDivesting for optional buyback and burn (if configured).), backing capital for that portion is released into capitalDivesting. Admin can later pull this capital for buyback and burnBuyback and BurnOptional mechanism where released capital from withdraws and yield surplus can be used to buy back and burn project tokens, reducing circulating supply. Enabled by the raise creator at raise creation. operations.

Supply dynamics

The project’s token circulating supply only increases when investors withdrawWithdrawClaim project tokens and forfeit principal protection on the withdrawn amount. Implemented by withdrawFT. Requires transferable to be enabled. Released capital moves to capitalDivesting for optional buyback and burn (if configured).. Investors only withdrawWithdrawClaim project tokens and forfeit principal protection on the withdrawn amount. Implemented by withdrawFT. Requires transferable to be enabled. Released capital moves to capitalDivesting for optional buyback and burn (if configured). when the token price exceeds their redemptionRedeemExercise principal protection and exit to collateral. Implemented by the divest contract function. Permissionless and on-chain. value. Unlike traditional vesting where tokens unlock on a timer regardless of performance, new tokens only enter circulation when the raise is succeeding.

The capital released by each withdrawalWithdrawClaim project tokens and forfeit principal protection on the withdrawn amount. Implemented by withdrawFT. Requires transferable to be enabled. Released capital moves to capitalDivesting for optional buyback and burn (if configured). funds buybacksBuyback and BurnOptional mechanism where released capital from withdraws and yield surplus can be used to buy back and burn project tokens, reducing circulating supply. Enabled by the raise creator at raise creation. that offset the new supply. Supply inflation has a built-in counterweight.

Capital flow summary

1

Deposit

Investor deposits collateral

2

Active Backing

In strategy, earning yield

Investor chooses one

Redeem

Collateral returned to investor

Exits system

or

Withdraw FT

Collateral moves to capitalDivesting

Admin Pulls

Capital available for buyback and burn (if configured)

Tokens Burned

Reducing circulating supply