Redemption

Downside-Protected Notes (D-Pros) — both Yield D-Pros and Growth D-Pros — have a fixed maturity date. Protection is not perpetual; it applies at settlement on that date. Fixed terms let issuers align notes with launches, listings, and treasury timelines while keeping risk and cost bounded.

Redemption Mechanism

When a D-Pro reaches maturity, settlement uses a manipulation-resistant price:

Price measure: the 72-hour VWAP of the project token immediately prior to the maturity timestamp.

Given that price, redemption follows this logic:

A) Market up or flat (no drawdown)

• Yield D-Pro: Holder redeems the LP position (LP tokens), including any accrued trading fees per terms.

• Growth D-Pro: Holder receives the defined upside payoff (spot-like participation per the note’s participation/cap).

B) Market down, drawdown ≤ 75%

• Full principal protection. The holder redeems LP tokens whose current market value equals their original principal (protection pays in LP).

• Applies identically to Yield D-Pros and Growth D-Pros.

C) Market down, drawdown > 75%

• Protection is capped. The holder redeems LP tokens per the protection schedule, which absorbs losses up to the 75% floor.

• Any loss beyond 75% is borne by the holder; however, the redeemed LP value remains strictly better than being unprotected over the same move.

Settlement asset: The protection leg always settles in LP tokens backed by the on-chain collateral. Holders can instantly withdraw LP to constituents if they prefer spot assets.

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Rollover / Extension (Optional)

Issuers may offer a rollover into a new series with a new maturity and parameters (floor up to 75%, participation/cap, term):

• Accept rollover: The old note is burned; a new note is issued with the updated terms.

• Decline rollover: Redeem under the default mechanics above (72-hour VWAP, settlement as specified).

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Post-Redemption Choices (for both note types)

• Retain LP Position: Continue holding LP tokens to stay in the pool.

• Withdraw Underlying Assets: Burn LP to receive the constituent tokens and exit the position.

This structure keeps settlement permissionless, auditable, and predictable, while making the downside floor and settlement asset crystal clear to holders.