Fund Closure & Emergency Protocols
This section describes OLTA’s procedures for closing a fund or activating emergency actions in response to extreme events or structural failures.
Fund Closure Triggers
A fund may be closed under any of the following conditions:
Structural Failure: Persistent oracle malfunction, NAV mispricing, or critical smart contract exploit
Liquidity Collapse: Inability to execute trades or maintain index weights due to illiquid markets
Governance Vote: Token-holder approved resolution to sunset a specific index product
Regulatory Intervention: Legal orders or compliance demands requiring fund suspension
Rebalancing Impossibility: Technical or market constraints prevent necessary rebalancing
Closure Procedure
Trigger Detection: Automated system or governance committee flags incident
Review Phase: Rapid assessment window (e.g., 24–48h) to confirm event severity
Emergency Vote (if applicable): Governance approval for fund closure, unless auto-triggered
Redemption Period: Users are notified and given a window (e.g., 5–10 days) to redeem their IRTs for USDC at final NAV
Fund Deactivation: Smart contract locks further entries and unwinds remaining assets
Post-Mortem & Disclosures: Public summary of event, decisions, and lessons published
Emergency Protocols (Non-Closure)
Oracle Switch Mechanism: If primary price feed fails, backup oracle is triggered
Trading Suspension: Temporary freeze of fund transactions if pricing anomalies exceed thresholds
Slippage Circuit Breakers: Smart contract-level checks to prevent entries/exits during extreme execution spreads
Governance Fast Track: Emergency proposals may bypass normal quorum delays if conditions are met
These protocols ensure that OLTA remains resilient and user-protective in the face of extreme volatility, technical disruptions, or regulatory shocks.
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