> For the complete documentation index, see [llms.txt](https://airewardrop.gitbook.io/air3/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://airewardrop.gitbook.io/air3/protocol/worked-examples.md).

# Worked Examples

These examples use consistent terminology:

* **vault weight / user share** = the user's percentage of current vault equity
* **principal basis** = accounting basis used to calculate realized PnL
* **realized value** = stable proceeds actually recovered from the pro-rata reduction of positions

## Example 1: User exits at 30% vault share

Assume:

* `vaultTotalEquityNow = 1,000`
* `userShareValueNow = 300`
* `userWeightNow = 30%`

Open positions:

* Position A
* Position B
* Position C

### Withdrawal behavior

The protocol reduces:

* 30% of position A
* 30% of position B
* 30% of position C

The stable proceeds from those reductions become the user's `realizedValueForUser`.

Then the protocol:

* creates an `ExitTicket`
* sets `unlockTime = now + 7 days`
* excludes the user immediately from vault PnL and epoch rewards (including the current epoch)

## Example 2: Positive realized PnL on withdrawal

Assume:

* `principalBasisForUser = 100 USDC`
* `realizedValueForUser = 120 USDC`

Calculation:

* `realizedPnlForUser = 120 - 100 = +20 USDC`

Illustrative settlement flow (protocol rules and fees may be implementation-specific):

* capital component in stable: `100 USDC`
* profit component: `20 USDC`
* profit component may be converted to AIR3
* AIR3 profit split:
  * 50% buyback allocation
  * 50% user allocation

User settlement:

* stable capital return
* AIR3 equivalent for the user portion of positive realized PnL

## Example 3: Negative realized PnL on withdrawal

Assume:

* `principalBasisForUser = 100 USDC`
* `realizedValueForUser = 85 USDC`

Calculation:

* `realizedPnlForUser = 85 - 100 = -15 USDC`

Settlement outcome:

* `payoutStable = 85 USDC` (claimable after the 7-day delay)
* `AIR3 reward = 0`
* the loss is absorbed by the user's allocation through the lower realized value

## Example 4: Withdrawal request during an active epoch (anti double-counting)

A user sends `WithdrawRequest` while an epoch is still active.

Protocol behavior:

* the vault reduces the user's pro-rata share immediately
* an `ExitTicket` is created
* the user is excluded immediately from active PnL participation
* the user is excluded from current-epoch reward allocation

Result:

* the user is settled through the withdrawal path only
* the user does not receive a second allocation via epoch settlement

## Example 5: Large concurrent exits (90% of vault equity requests withdrawal)

If users representing 90% of vault equity request withdrawal in a short window:

* the protocol attempts to reduce approximately 90% of each open position pro-rata
* the remaining active vault continues with a materially smaller position base
* realized values for exiting users depend on execution quality, market conditions, fees, and slippage during the unwind
* temporary processing or execution delays may occur under stressed conditions
* implementation-specific safeguards can trigger controlled unwind modes, batching, or temporary limits

This example highlights an operational stress case, not a change to the core accounting model.