Restoration Framework

The Restoration Framework guarantees deterministic principal protection for Vault Curators by restoring their vault balance 1:1 to its pre-trade state — even in adverse market or operator failure scenarios. It operates through a tiered system that prioritizes restoration over penalty, ensuring vault solvency at all times.

Restoration Reserve

Protocol-managed pool that serves as the final restoration layer.

Funded by:

• Stability Fee applied each epoch on delegated YODL

• 33% of YODL Total Supply pre-allocated at genesis

• 10% of all operator slashing events automatically routed here

This reserve ensures deterministic, full principal restoration even in multi-layer or systemic drawdowns.

Optional Third-Party Protection

Institutional curators can opt in for external protection through partners such as Catalysis or similar providers.

These reserves can support specific market pairs or institutional vaults with programmable on-chain settlement.

This layer extends protection but is not required for full restoration.

Restoration Activation

Restoration is triggered automatically during bounded liquidation when a vault’s Health Factor (HF ≤ 1.0) signals a shortfall.