Yield & Exit distributions

When off-chain proceeds exist, the custodian records the net amount in a segregated, non-interest-bearing escrow and then publishes a claimable balance per registered EVACT holder (EVACT = Asset Claim Token, ERC-721) via the on-chain Registry. Publication can be either a Merkle root (recommended) or individual per-address amounts. Holders submit a claim request in the app, complete KYC with the custodian, and receive their payout off-chain. No token representing cash or cash-equivalents is minted on-chain. The Registry prevents double-claims and logs every disbursement.

Sequence

1. Confirm and settle off chain The custodian confirms the exit or yield event, reconciles amounts, and moves net proceeds into a segregated, non-interest-bearing escrow.

2. Take a snapshot At a published block height, the vault snapshots total vault token (ERC-20) supply S and each holder balance s_i.

3. Publish entitlements on chain The custodian posts either a Merkle root (over (address, amount, nonce)) or a per-address mapping to the Registry contract, together with vault, snapshotBlock, totalDistributable, and a memoURI (supporting evidence and notes).

4. Claim with KYC Holders connect the wallet that held tokens at the snapshot, complete KYC with the custodian (or be already verified), submit their proof, and receive off-chain payout (e.g., bank transfer or custodian-supported stablecoin). The Registry marks claims to prevent double-spend and logs a disbursement reference on chain.

5. Optional reinvest After receiving cash, holders may buy more vault tokens (ERC-20) on Uniswap. There is no on-chain coupon to burn or convert.

Pro-rata math

If the distributable amount is D_quote (in the vault’s quote currency), total supply at the snapshot is S, and your balance is s_i, then:

entitlement_i = floor(D_quote × s_i ÷ S)

Rounding is to the smallest currency unit supported by the custodian. Any indivisible remainder (“dust”) stays in escrow and is rolled into the next publication. Transfers after the snapshot do not affect the claim.

KYC and responsibilities

KYC is Custodian-led. The custodian performs KYC/contract checks. Trading of vault tokens (ERC-20) does not require KYC; claiming cash does. Only the Merkle root (or per-address amounts) and memo hash are on-chain. Personal information remains off-chain with the custodian.

Corrections and edge cases

• Transfers around the snapshot. Entitlements follow the holder of vault tokens (ERC-20) at the snapshot block; there’s no look-back to deposit time.

• Corrections. If an error is found, the custodian posts an adjusted root and memo. No clawbacks; differences are handled via additional postings.

• Unclaimed funds. Remain claimable per the custodian’s published policy (and any statutory requirements).

• Pauses. Operational pauses do not invalidate already-published claims.

Konvi example (how this looks in practice)

For Konvi-run vaults, the user’s Konvi account (KYC’d) is linked to a Konvi-connected wallet (auto-generated with thirdweb) that holds their EVACT (ERC-721) and/or vault tokens (ERC-20). When Konvi publishes a distribution root to the Registry, the holder signs in, passes or confirms KYC, and submits their claim. Konvi pays the cash off-chain to the user’s registered payout method. If a user acquired tokens outside Konvi, they can still claim by linking their external wallet to their Konvi account and completing KYC.

Why this model

• No on-chain cash instrument. Avoids EMT/ART classification risks by keeping cash off-chain.

• Auditability. On-chain proofs (snapshot, totals, Merkle root) plus off-chain memos and escrow records.

• Simplicity. Holders either claim cash off-chain or independently buy more vault tokens (ERC-20) on the open market; there is no coupon token to manage.