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

# Mechanics

> How Axient separates decision, matching, settlement, finality, and redemption for a leveraged event position.

# A leveraged event position passes through five distinct stages.

Axient is designed to keep financing, execution, and the eventual event payout as separate accounting events. A displayed book, a venue match, settled cash, final payout, and redeemed collateral are not interchangeable.

## Position construction

**User collateral + separate financing → actual YES or NO outcome tokens.**

The user holds a venue-native outcome token alongside isolated collateral and a separately accounted loan. Short YES is represented by holding NO where the venue provides a valid YES/NO relationship; it is not an unsecured negative token balance.

## Decision → Match → Settlement → Finality → Redemption

### 1. Decision

Axient computes a permitted order from current venue data and conservative operating limits. For a hard-flat action, it plans the smallest sale certified to raise enough **settled** proceeds over the configured horizon, including applicable fees and buffers. A midpoint or an observed book alone is not repayment cash.

### 2. Match

The venue reports fills. A match records an execution event, but it is not yet final cash and does not by itself reduce debt.

### 3. Settlement

The venue confirms the asset and cash transfer. Only settlement-confirmed cash that is applied to the loan ledger may reduce debt. When the ledger is zero, the remaining outcome tokens are a fully funded 1× spot claim.

### 4. Finality

The venue’s outcome payout vector becomes final after any proposal, delay, challenge, dispute, override, or void process. A provisional proposal is never treated as final settlement.

### 5. Redemption

The final outcome token is converted into withdrawable collateral according to the venue’s authoritative payout vector. Redemption is later user liquidity; it is distinct from the settled cash used to close a loan.

## Auto-deleverage to spot

Before finality, Axient moves the position to reduce-only and plans a conservative sale. It seeks to sell no more than needed to extinguish debt, subject to executable depth, fees, settlement, and the registered operating limits. After confirmed repayment, the residual claim is 1× spot and no longer accrues borrowing cost.

The planned quantity is selected before future fills and settlement are known. A post-settlement calculation can audit how much was actually needed, but it cannot be used circularly to justify the earlier order.

## Shared liquidity

Risk limits are calculated for the combined position queue on a market. Multiple accounts cannot each reuse the same best bids when estimating their exits. Market open interest is capped by aggregate exit capacity, with a defined execution priority and shared-book limits.

## Disputes and finality

In the normal operating path, a market does not enter delayed or disputed finality with an active Axient loan. After settlement-confirmed repayment, the residual claim waits for the actual final payout vector. The user remains exposed to the value of that residual claim.

## Failure states

The mechanism does not present every path as a successful conversion. An explicit exception state can be entered when:

* a market closes earlier than scheduled;
* executable depth falls below the certified range;
* signing authority is unavailable;
* settlement exceeds the configured horizon or fails; or
* venue and account state cannot be reconciled.

The response is to pause, restrict, or process the position through exception and reserve rules. It is not a fake successful conversion.

## Scope

<Note>
  Private MVP and simulation are mechanism validation. They do not constitute a public production-safety or regulatory claim.
</Note>

## Read next

<CardGroup cols={2}>
  <Card title="Debt-free finality" icon="sigma" href="/debt-free-finality">
    See the condition under which a residual claim becomes debt-free spot.
  </Card>

  <Card title="Controls and assumptions" icon="shield-check" href="/controls-and-assumptions">
    Review the controls and failure boundaries behind the reference mechanism.
  </Card>
</CardGroup>