Treasury floor

Reserves

fact The Treasury holds USDG, whitelisted Stock Tokens, COUPON legs and NOTE. reserveValueQuote() values everything except NOTE in USDG:

Asset	Valuation
USDG	Par
Stock Tokens	Chainlink-style feed (`addStockAsset`), reverts `StaleFeed` if older than `maxFeedStaleness` (26 hours by default) or `InvalidPrice` if the answer is not positive
COUPON legs	`legValueFactorWad`: par (1 USDG per unit) when Autocalled or Matured unbreached, and while Live with the barrier intact on both the last observation and the latest fresh print; otherwise while Live `min(1, liveMark / s0)` with `liveMark = min(last observed price, latest fresh print within 30 minutes)`; Matured breached at `min(1, lastPrice / s0)`; zero in any other status. Series must be registered with `registerLegSeries` (owner or BondDepository). Accrued coupons and terminal payouts are pulled by the permissionless `harvestSeries(seriesId)`
NOTE	Excluded (it is the liability side)

Floor and redemption

circulatingSupply = NOTE.totalSupply − NOTE.balanceOf(Treasury) floor = reserveValueQuote / circulatingSupply previewRedeem(n) = n × reserveValueQuote / circulatingSupply × (1e4 − redemptionHaircutBps) / 1e4 dailyRedemptionRemaining = reserveValueQuote × dailyRedemptionCapBps / 1e4 − redeemedInWindow

redeem(noteAmount, minQuoteOut) burns the caller’s NOTE and pays previewRedeem in USDG, provided it does not exceed dailyRedemptionRemaining() and the Treasury holds enough USDG (InsufficientLiquidity otherwise). The limiter is a leaky bucket: redemptionUsed() is the usage recorded at the last redemption, amortised linearly to zero over REDEMPTION_WINDOW = 1 day, so over any span t the Treasury pays at most cap × (1 + t / 1 day) and never more than cap in one burst.

Parameter	Value	Hard maximum
`redemptionHaircutBps`	0 in `DeployToken.s.sol`; `PROTOCOL_SPEC.md` anticipates 200 (2%)	5,000 (50%)
`dailyRedemptionCapBps`	500 (5%) in `DeployToken.s.sol`; `PROTOCOL_SPEC.md` specifies 200 (2%)	10,000
`maxFeedStaleness`	26 hours	—

tbd The deploy script and the specification currently disagree on both redemption parameters. Both are constructor arguments and can be changed by the owner with setRedemptionParams(haircutBps, dailyCapBps). The examples below use the specification’s 2% haircut and 2% daily cap and are illustrative.

Worked example

illustrative Reserves: 3,000,000 USDG + 4,000 NVDA tokens at 180.00 = 720,000 + 280,000 USDG of COUPON legs at par. reserveValueQuote = 4,000,000. Total NOTE supply 12,000,000 of which 2,000,000 is held by the Treasury; circulating 10,000,000.

Quantity	Value
Floor	4,000,000 / 10,000,000 = 0.400 USDG per NOTE
Redemption of 100,000 NOTE at 2% haircut	100,000 × 0.400 × 0.98 = 39,200 USDG
Daily allowance	2% × 4,000,000 = 80,000 USDG
Redemptions possible today	80,000 / 0.392 ≈ 204,081 NOTE
After redeeming 100,000 NOTE	reserves 3,960,800; circulating 9,900,000; floor 0.40008

Redemption at a haircut slightly raises the floor for remaining holders, because the redeemer leaves 2% of their share behind.

Why a cap and a haircut

The daily cap prevents a run from draining the Treasury’s liquid USDG in one block while Stock Tokens and legs, which are less liquid, remain. Redeemers queue across days and the Treasury can rebalance.
The haircut makes redemption a floor rather than an arbitrage engine: NOTE has to trade below floor × (1 − haircut) before burning beats selling.
Liquidity: redeem pays only USDG. If USDG on hand is insufficient the call reverts; governance can sell Stock Tokens or wait for legs to settle. The floor is a valuation, not a guarantee of same-day liquidity for all reserves.

Reserve flows

Inflow	Source
Bond proceeds	`BondDepository` (USDG, Stock Tokens, COUPON legs)
10% of protocol fees	`RevenueRouter`
Desk returns	COUPON coupons and principal from Desk positions
Stock Tokens bought from the Desk at feed value	`Desk.liquidateToTreasury` → `Treasury.purchaseStock`

Outflow	Authority
NOTE redemption	Permissionless, capped
USDG paid to the Desk for Stock Tokens	`purchaseStock` (Desk only, at feed value, `StockPurchased`)
`withdrawERC20(token, to, amount)`, `withdrawLegs(seriesId, to, units)`	Timelock owner only (`Withdrawn`, `LegsWithdrawn`); registered, enabled reserve assets and COUPON legs are valued through the reserve mark and consume the daily redemption budget shared with `redeem` (`DailyCapExceeded`)
`mintNote(to, amount)`	Timelock owner, within epoch cap (`NoteMinted`)

Governance withdrawal authority is the main trust assumption on the floor; see Governance for timelock and guardian arrangements.