Bankruptcy Remote Structure

This page explains how YieldFi structures user assets and Vault operations to achieve bankruptcy-remoteness by design—i.e., to isolate user 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 YieldFi’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 legal enforceability

Core building blocks

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

Vault-level ring-fencing of liabilities

• Vault liabilities (fees, execution costs, hedging, 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)

Contractual recourse perimeter (who can claim what)

• Strategy counterparties and service providers contract with YieldFi on Vault-scoped terms, intended to limit recourse to the relevant Vault assets where applicable • User terms define the Vault’s payment waterfall and the method of mint/redemption and fee charging • Transfers, execution, and protocol interactions are constrained to whitelisted endpoints, whitelisted assets and controlled roles

Operational separation from corporate treasury

• YieldFi maintains separate operational treasury distinct from Vault assets • Corporate expenses are funded from corporate treasury—not from Vault assets—except for Vault-attributable expenses explicitly disclosed in Vault terms

Diagram — bankruptcy-remote intent

                    YieldFi (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, Vault-level ledgers, and prohibition on cross-Vault transfers • Permissioned asset movement: Role-based controls, maker-checker for sensitive actions, and immutable on-chain audit trails • Reconciliation and attestations: Reconcile MPC + exchange balances to Vault ledgers and token supply; investigate and document exceptions • Versioned Vault terms: Controlled changes to fees, valuation policy, and risk limits with clear governance