> For the complete documentation index, see [llms.txt](https://docs.aquaflux.pro/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.aquaflux.pro/the-primitives/lifecycle.md).

# Lifecycle

Lifecycle — From Bond to LEGO® and Back

*Tokenize → Split → Compose → Merge → Unwrap*

### TL;DR

Start with a real-world asset. Turn it into an on-chain token. Split it into **P / C / S**. Mix and match however you like. When you are done, rejoin the pieces and exit back to the original asset.

Five actions, fully reversible, at your own pace.

<figure><img src="https://4194194105-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FGnHaS6UqS7TXlwer5M3k%2Fuploads%2FqjbkydtWYSjbGowDQKJH%2Fimage.png?alt=media&amp;token=389c123c-ff75-47dc-a41a-8e8f8a0ee970" alt=""><figcaption></figcaption></figure>

### The 5 Actions <a href="#the-5-actions" id="the-5-actions"></a>

The 5 actions are independent, you may only need to perform one.

1. &#x20;`wrap()` — Tokenize the asset
   * **What you do:** Lock a verified RWA into AquaFlux.
   * **What you get:** An on-chain position (aqToken) with clear **maturity**, **coupon schedule**, and **S-coverage**.
   * **You can:** hold it, or move to step 2 to split.
2. &#x20;`split()` — Create P / C / S
   * **What you do:** Turn the aqToken into three tokens:
     * **P** = Principal (redeems 1.00 at maturity)
       * **C** = Coupon (income stream)
       * **S** = Shield (first-loss + surplus streams)
   * **You can:** trade them, LP them, or use them as collateral (market-dependent).
3. &#x20;**Compose** — Build your payoff
   * **What you do:** Mix P / C / S to match your goal:
     * **P only** → principal + time value
     * **C only** → income
     * **S only** → higher carry with first-loss risk
     * **P + C** → “classic bond”
     * **P +  S** → “cash-plus”
     * **C + S** → “enhanced carry”
     * ...
   * **You can:** automate strategies or just hold what fits your view.
4. &#x20;`merge()` — Rejoin the pieces
   * **What you do:** Combine P / C / S back into an aqToken.
   * **Why useful:** simplifies positions, prepares for unwrap, or resets strategy.
5. `unwrap()` — Exit back to the original asset
   * **What you do:** Convert the aqToken to the off-chain claim per pool rules.
   * **When:** at maturity or as allowed by the pool (some pools only settle at maturity).

### What you can do at each stage

* **Trade anytime (T+0):** buy/sell P / C / S in the pool.
* **Provide liquidity:** earn fees and incentives (where offered).
* **Borrow/lend (market-dependent):** P often gets **higher LTV**, C medium, S low/ineligible.
* **Manage duration:** roll P to nearer maturities; time coupon calendars with C.

### FAQ

**Do I have to merge to redeem P?**\
No. **P** redeems **1:1 at maturity**. Merging is optional.

**Can I exit early?**\
Yes—sell P / C / S in the pool at market price (T+0), subject to liquidity.

**Is S principal-protected?**\
No. **S is first-loss**; it earns surplus streams but can be impaired.

**Who sets parameters like S-coverage and fee shares?**\
Each pool defines them. Check the pool panel before acting.