Bankruptcy Remote Structure

This page explains how Evolve structures user assets and Vault operations to achieve bankruptcy-remoteness by design—i.e., to isolate Vault assets and Vault liabilities from the operating company’s balance sheet and from unrelated creditors, to the maximum extent practical given the legal and operational setup.

---

Objective

• Ring-fence each Vault’s assets and liabilities from Evolve’s corporate assets and liabilities

• Reduce the risk of commingling, set-off, or creditor attachment in an insolvency scenario

• Ensure Vault cashflows are applied only to Vault obligations, based on a defined recourse perimeter

• Provide governance, controls, and documentation that support enforceability

---

Core building blocks

1) Asset segregation at the wallet and account level

• Each Vault operates with a dedicated MPC wallet set:

  • deposit

  • collateral/strategy

  • redemption/processing

• Each Vault uses dedicated exchange sub-accounts with explicit Vault attribution (where relevant)

• Vault assets are tracked and reported Vault-by-Vault (positions, NAV, token supply, liabilities)

---

2) Vault-level ring-fencing of liabilities

• Vault liabilities (fees, execution costs, hedging costs, operational expenses) are allocated to the Vault under the Vault terms

• No cross-Vault support: assets of one Vault are not used to satisfy another Vault’s obligations

• Cash movement pathways are constrained to the Vault’s approved lifecycle flows (deposit → strategy → redemption)

---

3) Contractual recourse perimeter (who can claim what)

• Strategy counterparties and service providers contract on Vault-scoped terms, intended to limit recourse to the relevant Vault assets where applicable

• User terms define:

  • payment waterfall

  • mint/redeem mechanics

  • fee mechanics

• Transfers, execution, and protocol interactions are constrained to:

  • whitelisted endpoints

  • whitelisted assets

  • controlled roles and permissions

---

4) Operational separation from corporate treasury

• Evolve maintains a separate operating treasury distinct from Vault assets

• Corporate expenses are funded from operating treasury—not from Vault assets—except for Vault-attributable expenses explicitly disclosed in Vault terms

---

Diagram — bankruptcy-remote intent

                         Evolve (Operating Company)
      (people, IP, product, software, ops treasury, vendor contracts)
                                |
                                |  no commingling of funds
                                v
  ------------------------------------------------------------------------
  Vault A (ring-fenced pool)     Vault B (ring-fenced pool)      Vault C
  - MPC wallets + exch accts     - MPC wallets + exch accts      - ...
  - Vault NAV + token supply     - Vault NAV + token supply
  - Vault liabilities only       - Vault liabilities only
  ------------------------------------------------------------------------
           |                           |                          |
           v                           v                          v
       Users of Vault A            Users of Vault B           Users of Vault C

---

Control framework supporting remoteness

Segregation controls

• Dedicated wallets/accounts per Vault

• Vault-level ledgers and reporting outputs

• Prohibition on cross-Vault transfers (unless explicitly defined via a controlled, versioned process)

Permissioned asset movement

• Role-based controls across software modules and signing policies

• Maker-checker approvals for sensitive actions

• Immutable onchain audit trails for all wallet movements

Reconciliation and attestations

• Reconcile MPC + exchange balances to Vault ledgers and token supply

• Investigate and document exceptions with clear ownership and resolution notes

• Attestations / audits where applicable (and disclosed per product)

Versioned Vault terms

• Controlled changes to fees, valuation policy, risk limits, and whitelists

• Clear governance workflow (proposal → review → approval → versioned release)