We can best demonstrate the redemption process with an example. Assume that the below nToken account has 100 nTokens outstanding and a user wishes to redeem 10 nTokens.
Note: the below example uses arbitrary values for the ratios of liquidity token cash claims to fCash claims in step 2, and arbitrary exchange rates between fCash and cTokens in step 4.
Upon redemption, Notional calculates the redemption share - the share of the total supply of nTokens that the user is redeeming.
Notional converts the nToken account's liquidity tokens to cTokens and fCash in memory.
Notional applies the redemption share to the nToken's cToken balance and each net fCash balance.
User share of net nToken holdings:
Notional trades the user's share of each fCash balance for cTokens via the corresponding liquidity pools.
Converted fCash holdings:
Notional returns a net cToken amount to the user.