The one fee

The protocol's only revenue source is the auction:

| Operation | Fee | | --- | --- | | Split, merge, unsubscribe, open, settle, terminate, all claims | 0 | | Auction clearing | 5% of gross — charged to the premium, not the principal |

The 5% is deducted before subscribers' proceeds are credited; buyers pay nothing on top of the clearing price.

Risks you should actually read

Upside buyers

• The clearing price is your entire cost. At settlement, if S ≤ K, the Upside expires worthless — a 100% loss of premium.
• There is no secondary market inside the protocol: early exit depends on third-party liquidity.

Income subscribers

• The auction can fail (zero premium), or clear at the 2% floor.
• Income is not principal protection: the underlying falls as much as it falls; your cushion is only the premium collected.
• Issuer risk: if the stock token's issuer destroys vault collateral, redemptions scale down pro-rata (see Settlement & claims). Nobody can be front-run in that process, but the loss is real.

Everyone

• Oracle risk: settlement depends on the price feed and its cross-check band. A dead oracle triggers the terminate fallback (S = P0), which may differ from the market's view.
• Mock-environment risk (testnet): asset tokens, oracle and stablecoin here are testnet stand-ins with issuer powers that intentionally mirror the real deployment's risk surface.
• Regulatory: structured products on equities carry regional restrictions; the compliance gate reflects a testnet stance, not legal advice.

What protects you

• The vault always holds the real stock token, one per issued pair — verifiable on the explorer at any moment.
• Merge is unstoppable: guardian pauses, issuer freezes and admin actions can never block redemption or claims.
• Snapshot math is immutable; shortfall accounting is public and proportional.
• The auction is a pure function of time — no price manipulation surface in the clearing itself.