Partial withdrawals

A partial withdrawal returns some BTC to you while leaving a smaller V2 vault backing the loan.

You can withdraw from a healthy position before or after a partial liquidation. One Bitcoin transaction pays you and creates a new collateral output, preserving the loan against the balance.

What limits the amount?

The remaining collateral must support the debt under the withdrawal health check. The signed outcomes must also remain viable after fees, anchor outputs and dust requirements.

A withdrawal can satisfy the lending ratio but still leave too little BTC for a valid replacement liquidation. Both checks matter.

Coverage comes before broadcastability

flowchart TD
    H["Check remaining borrowing power and create Ethereum claim"] --> W["Construct withdrawal and exact remainder outpoint"]
    W --> G["Sign and verify replacement grid and lifecycle coverage"]
    G --> S["Complete cooperative withdrawal signature"]
    S --> B["Broadcast and confirm on Bitcoin"]
    B --> E["Settle Ethereum collateral record"]

Prepare the remainder’s own position binding and event commitments first, producing its new vault address. The withdrawal’s transaction body then fixes the new remainder outpoint. Its replacement grid must cover that exact output, with each customer cheque signature bound to its intended event-keyed leaf.

Only after coverage verifies can the cooperative withdrawal signature be completed. This avoids creating an indebted vault that has no usable pre-signed liquidation path.

Ethereum marks settlement as pending and must recognize the confirmed Bitcoin spend before completing the collateral transition.

What needs signing again?

You authorize the cooperative withdrawal and the transaction coverage required for its new remainder. That package includes the remaining liquidation paths and the applicable release, lapse and veto templates.

The number of grid signatures depends on the covered outcomes. A wallet may group review steps, but the underlying authorizations must still be visible and verifiable.

The reduced two-CET profile is explained separately in Demo status. It demonstrates this same replacement-before-broadcast requirement with a small grid.

What happens to the old transactions?

Once the withdrawal spends the old vault, old transactions that spend that same outpoint cannot confirm on the same Bitcoin chain. The new output is governed by its replacement package.

If liquidation wins the conflicting spend instead, the proposed withdrawal is no longer valid. Reconcile the canonical Bitcoin result and the Ethereum claim before making another request. Signing an alternative is not confirmation that it won the race.

Before approving

Review the BTC you receive, total collateral removed including fees, the new remainder amount, its exact output, and the replacement liquidation payouts. Confirm that its oracle events and recovery clocks fit the remaining coverage period.

For full repayment and exit, see Closing your position.