4.3.2.1. Amicable Wind Down Process

The document refers to an Amicable Wind Down Period as a 90-calendar day period starting on the day after a Minter De-Permissioning. In providing a window for the execution of an Amicable Wind Down, the Adopted Guidance intends to avoid, as much as possible, any unfairness towards a Minter, as well as protect its ability to resolve any outstanding liability against the protocol.

During an Amicable Wind Down, the SPV Operator shall act as the supervisor of the orderly wind down and shall assist the Minter on a best-effort basis in redeeming its Owed M. To redeem, the Minter shall purchase and burn M by calling the burn() function and specifying the Minter’s address in that call, which effectively reduces the Minter’s Owed M balance by the burned amount. Following each Burn Event in its respective address, the Minter shall notify the SPV Operator, and the SPV Operator shall verify the occurrence of such Burn Event on-chain. Upon successful verification, the SPV Operator shall initiate the sale of Eligible Collateral and transfer an amount to the Minter that equals the amount burned in a Burn Event divided by the Mint Ratio, which was valid at the time the Minter De-Permissioning occurred.

During an Amicable Wind Down, the SPV Operator shall not be obliged to meet any portfolio composition requirements laid out in the Adopted Guidance. If the Minter wishes to provide recommendations to the SPV Operator concerning the sale of Eligible Collateral with respect to (including but not limited to) minimum execution price, execution time and type of instrument, such recommendations shall not be binding. However, the SPV Operator shall commit to following them solely on a best-effort basis. If a full repayment of the Minter’s Owed M is reached within the Amicable Wind Down period, any residual financial value shall be paid to the Minter.

If a full repayment is not reached within the Amicable Wind Down period, no further amounts shall be paid to the Minter and the SPV Operator shall initiate a Non-Amicable Wind Down, as described below.

For sake of clarity: during the Amicable Wind Down Process, the option to transition into a Non-Amicable Wind Down Process with immediate effect is not excluded. While it is the main goal of the SPV Operator to protect the stability of M, this can only be achieved if the SPV Operator does not face a situation where itself might be in violation of applicable laws within the jurisdiction it is operating from. Therefore, in the case of severe changes in circumstances, especially but not limited to its contractual relationship with the Minter, leading to the situation that the SPV Operator needs to cease its contractual relationship with the Minter to maintain compliance, the SPV Operator might transition from a Amicable to a Non-Amicable Wind Down Process with immediate effect in regards to the Minter.