> The index of every page is at https://docs.nova.markets/llms.txt. The complete documentation in one file is at https://docs.nova.markets/llms-full.txt.

# Pool mechanics

Address: https://docs.nova.markets/#/pool-mechanics
Section: How it actually works

One Conviction Pool behind every market: what that means precisely, and why deposits move on epochs.

## The counterparty

Every position on every Nova market has the same other side: the Conviction Pool. When a trader closes in profit, the pool pays the difference; when a trader closes at a loss or is liquidated, the pool keeps it. There is no peer on the other end of your trade, and no borrowed asset: the leverage is synthetic, backed by the pool.

## What it collects, what it pays

Into the pool: borrowing fees from every open position, for as long as it stays open; liquidation proceeds; and trader losses. Out of the pool: trader profits. Two flows deliberately pass it by: **opening fees** belong to the holders of the market's [Conviction Token](https://docs.nova.markets/revshare.md), a lifetime share of its fees, and **funding** is paid between longs and shorts to keep each market's book balanced; it can even work in a trader's favour, and the pool never touches it. Depositors also earn Conviction Points continuously while their capital is at work.

## The share price tells the truth

A share's price is simple arithmetic: what was deposited, plus every fee the pool has earned, minus the traders' net profit against it, including the unrealised profit and loss of positions still open, snapshotted at each epoch. You enter and exit at a price that already reflects the pool's exposure: there is no way to deposit just ahead of good news, or leave just ahead of bad, at a stale number.

## Why epochs

Pool capital is live: it is the counterparty to positions whose value moves every second. Open PnL is snapshotted at epoch boundaries, and that settled mark is the only price shares move at: a deposit enters instantly at that mark, and withdrawals are **requests** that settle on a boundary, then you claim. This is what makes the pool fair to sit in: nobody trades its shares against a swing the mark has not settled yet. A deposit starts backing trades, and earning, from the epoch it enters.

## Leaving

A withdrawal is requested, waits its delay counted in epochs, then is claimed in its window. The delay exists because your capital is backing open positions and has to be released, and it scales with the pool's health: the better collateralised the pool, the shorter the wait (1 to 3 epochs; an epoch is 3 days). Your shares keep earning fees for the whole lock. Cancel a pending request and the capital goes straight back to work.

## Can the pool fail to pay a winner?

The exposure is bounded on purpose. Each market carries open-interest caps sized against the pool, so the sum of what traders could win is limited relative to what the pool holds: a hot streak draws the share price down, it does not leave a winner unpaid. Above full backing, the pool builds a buffer: fees accumulating past 100% collateralisation sit as a cushion between traders and depositors before any drawdown touches deposits. The open-interest cap of each market is listed in [Markets and parameters](https://docs.nova.markets/markets.md).

## One pool, every market

A newly listed market plugs into the pool and trades with full depth from its first minute: no market raises its own liquidity, and no market trades against a thin, drainable pot of its own. Each market is capped in how much of the pool's capacity it may use, so no single market can monopolise the depth or the risk. The other side of the coin, said plainly: the pool's exposure spans the whole board. Depth is shared, and so is risk: one market's bad day is diluted across every market's fees.