05 — Mechanism
The treasury is the counterparty.
There is no book to fill and no other trader to match against. You post USDC, the vault escrows the most you can win, and the position settles against the coin's ratio to its paired stock.
Step 1
Pick a pair
A StonkFun coin and the tokenized stock it trades against. The market is the ratio between them — how much of the stock one coin buys — not either price in dollars.
Step 2
Post USDC
Your collateral is the most you can lose, with no exceptions and no clawback. Size is capped by the market's tier, per wallet and across everyone on your side.
Step 3
The vault escrows your win
Before the position opens, the treasury locks the full amount it would owe you at your cap. If it cannot, the position does not open. Payouts are never a promise.
Step 4
Close, or be closed
Close whenever you like and the escrow settles. If the ratio moves far enough against you, a keeper closes the position and the remaining collateral returns to the vault.
Why a ratio and not a dollar price
Settling in dollars would put a stock price feed inside the settlement path, and tokenized stocks inherit the equity market's schedule: they gap over weekends and they halt. A position that has to be marked at 3am on a Sunday against a feed that stopped updating on Friday is a position with a bug in it.
The ratio is read from the pool itself, which never closes. A long on GP against GLDx pays when GP gains on gold, whatever gold is doing in dollars. It is a cleaner bet and it removes an entire class of failure from the contract.
Why the caps are small
A thin pool can be pushed. Anyone who can move the ratio can also hold a position that profits from having moved it, so the only real defence is to keep the position small enough that pushing the pool costs more than the position can ever pay.
We measured that cost against every listed pool and set the caps under it, with the round trip through the pool — not just the buy — priced in. Above the floor the attack loses money; below it, it does not, which is where the floor comes from.