> For the complete documentation index, see [llms.txt](https://docs.auto.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.auto.finance/auto-pools-protocol/protocol-mechanics/asset-flow-example.md).

# Asset Flow Example

To understand the general architecture and functioning of the system, it helps to consider a simplified flow of assets within the system:

1. **Deposit** – User deposits assets into an autopool. After this action, the autopool has idle assets and the user gets the respective receipt token in return;
2. **Rebalance** – After a certain threshold of assets are deposited into the autopool, the Strategy backing it starts to accept proposals from the Solver. Once a proposal satisfies the constraints imposed by the Strategy, the assets in the autopool are sent to the Solver which will then return LP tokens to the autopool;
3. **Auto-compounding** – On a periodic basis, rewards from destinations are claimed and collected via a keeper process. These tokens are then converted into the autopool base asset;
4. **Debt Reporting** – Each autopool goes through a debt reporting where the system re-values the LP tokens held by that autopool. During that process, any available auto-compounded rewards are claimed and come into the autopool as idle funds;
5. **Restart** – With sufficient idle assets in the autopool, another rebalance can occur. 

In other words, users deposit assets into autopools, the stats contracts provide on-chain information about the market, and the solver proposes rebalances to the strategy. To be accepted, the proposed rebalance must meet the strategy's constraints.\
\
The above outline focused on idle → LP rebalances but the rebalance step can occur for LP → LP rebalances as well. So long as the proposal results in a higher potential return (and satisfies other constraints) it can be executed.


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