Funding Workflow

Digital Assets Prefunded Model

To start the funding process, DriveDigital will first need to open up a bank subaccount for the Partner. That subaccount must be linked up to the "Digital Assets Facilitation Account" under the Partner's institutional user, which acts as a funding account. All money will be wired by the Partner into that subaccount. You can think of the digital assets facilitation account as a "mirror" of the Partner's bank account.

Take for example the following: Jan 1, Partner X opens for business and sends DriveDigital $100k in prefunding. On Jan 5, John signs up with Partner X and deposits $200 and wants to buy Bitcoin immediately. While the $200 is in transit via wires/ACH, DriveDigital can leverage the $100k already received previously to execute the trade. The remaining $99,800 doesn’t belong to John or technically any other individual. It’s Partner X’s deployed capital, and it sits in an “omnibus” account that will facilitate trades. In this example, $200 is deployed to John immediately so that John can buy his Bitcoin without incurring the traditional payment rail’s wait time.

Assuming that the Partner has checked Bob's buying power, If Bob should sign up with Partner X and buy $500 of Bitcoin, that omnibus account would shift funds to Bob’s account in order for Bob to execute his buy trade. On the flip side, if John and Bob decide to sell their Bitcoin, the proceeds they receive from the sell are then swept back into the omnibus account for further use.

  • Bob's buying power is checked against the books & records on the Partners side.
  • Let's say Bob onboards on Jan5. He has $0 and the Partner's prefunded "omnibus" account has $1,000,000.
  • Bob wants to buy BTC. Partner checks his balance and shows he has $0, so he can't trade.
  • Bob deposits $300 with the partner. The Partner increases Bob's buying power to $300. Bob can buy instantly without Bob's $300 having to be wired over.
  • After the buy, his buying power drops to $0

In terms of the transit, the partner had the $300 and they either hold it at their bank or fx broker or accumulate all deposits across all users and then wire it to us at EOD.

If this prefund balance at the omnibus account continues to grow, or if users such as John and Bob decide to withdraw their funds, partners may elect to inform DriveDigital of withdrawals and DriveDigital will facilitate the withdrawal as outlined in later sections of this manual.

Prefunding Methods

Within this Prefunded Model there are 2 options:

  1. Wallet Partner - has the capability to hold customer funds and provides the funds directly to DriveDigital.
  2. Non Wallet Partner - does not have the capability to hold customer's funds. The funds will come from the Partner's third party provider instead of directly from the Partner. All other processes function the same.