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Fund Closure & Emergency Protocols

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

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Closure Procedure

  1. Trigger Detection: Automated system or governance committee flags incident

  2. Review Phase: Rapid assessment window (e.g., 24–48h) to confirm event severity

  3. Emergency Vote (if applicable): Governance approval for fund closure, unless auto-triggered

  4. Redemption Period: Users are notified and given a window (e.g., 5–10 days) to redeem their IRTs for USDC at final NAV

  5. Fund Deactivation: Smart contract locks further entries and unwinds remaining assets

  6. Post-Mortem & Disclosures: Public summary of event, decisions, and lessons published

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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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