> For the complete documentation index, see [llms.txt](https://docs.goevolve.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.goevolve.xyz/dd-questioniare/bankruptcy-remote-structure.md).

# 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

```id="evolve-bankruptcy-remote"
                         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)