Winding Down

In DeFi, winding down refers to the procedure of removing tokens from their wrapping and returning them to their original form, which involves several different platforms and additional tokens.

For instance, if a user has $fSNOW and wants to convert it back to $USDC, they will have to go through a number of difficult steps. Prior to redeeming $fSNOW for $fUSDC on a platform like Harvest Finance, the customer must first withdraw $fSNOW from the Snowswap exchange. They will then be able to convert $fUSDC into $USDC.

The difference between winding down and a straightforward token unwrapping is that the former uses several tokens along the route, whilst the latter usually only uses two tokens.