Risk Disclosure
Known Risk Categories
Valuation Risk
Outdated or conflicting NAV input data
Multi-source verification, audit cycle constraints, outlier exclusion
Liquidity Risk
Redemption surges exceeding budgeted capacity
Layered liquidity, two-channel redemptions with approval, quota management
Market Manipulation
PP pool depth may be insufficient, making prices susceptible to manipulation
TWAP sampling, buffer trigger, NAV disregarding short-term prices
Governance Attacks
Vote-buying leading to poor-quality assets being listed
Layered governance, hard thresholds non-voting coverage, timelock
Smart Contract Risks
Code vulnerabilities leading to fund losses
Multi-round audits, bug bounties, phased rollout
Underlying Asset Risks
RWA/Private Equity/Fund Credit/Market Risk
Launchpad hard thresholds, continuous disclosure, diversified allocation
Contingency Planning for Extreme Scenarios
Scenario: Mass Redemption Wave
Emergency quota depletion → T+0 redemptions rejected until quota refreshed
Standard quota exhausted → New T+7 redemptions rejected until quota refreshed
Large redemptions → Require keeper approval before processing
Quota status disclosed → Market-driven pricing of premiums/discounts
Risk control intervention → Keepers evaluate whether to refresh quotas or pause
Scenario: Significant NAV Decline
Underlying asset impairment → NAV downward adjustment via AssetController
PP market price may react prematurely → Discount widens
Keeper intervention → May reduce quotas or pause redemptions (Protection Band automation planned for Phase 2)
Ongoing disclosure → Market receives updated information
Asset disposal completed → NAV stabilizes → Quotas restored → Normal operations resume
Emergency Reserve Fund
Funding Sources
Agreement fee deductions + Initial reserves
Target Size
3-5% of Prime TVL
Trigger Conditions
Weekly NAV decline >10% or liquidity event
Authorization Usage
Risk Control Multi-Signature (3/5)
Disclosure Requirements
Weekly public disclosure of balances and transaction records
Risk Control Flow
Risk Level Trigger Thresholds
Normal
< 8%
< 70%
< 10 requests
Continue operations
Low
8-12%
70-85%
10-20 requests
Warning issued, increased monitoring
Medium
12-15%
85-95%
20-50 requests
Keeper review, may reduce quotas
High
> 15%
> 95%
> 50 requests
Emergency review, quotas paused
Response Timeline
Detection
0-1h
Automated alerts, initial assessment
Immediate
1-24h
Risk committee review, protective measures
Short-term
1-7d
Root cause analysis, stakeholder communication
Recovery
7-30d
Remediation, gradual return to normal
Valuation Risk Deep Dive
NAV Data Sources
External Audit
Quarterly
High
Custodian Report
Monthly
Medium
Issuer Disclosure
Weekly minimum
Medium
On-chain Oracle
Real-time
Low (signal only)
Conflict Resolution
When sources disagree:
Flag the conflict publicly
Use most conservative value
Escalate to risk committee
Publish resolution rationale
Liquidity Risk Deep Dive
Quota Stress Testing
Normal
<50% utilized
<50% utilized
Routine refresh
Moderate Stress
50-80% utilized
50-70% utilized
Increased monitoring
Severe Stress
>80% utilized
>70% utilized
Reduced refresh, stricter approval
Crisis
Depleted
>90% utilized
Pause new redemptions
Recovery Timeline
Immediate
0-24h
Pause emergency redemptions, assess situation
Short-term
1-7d
Process pending T+7 redemptions, communicate clearly
Medium-term
1-4w
Asset liquidation if needed
Recovery
4-12w
Gradually restore quotas, return to normal operations
Governance Attack Vectors
Known Attack Types
Vote Buying
Purchasing votes to pass harmful proposals
Timelock, hard threshold protection
Flash Loan Governance
Borrow tokens, vote, return
Snapshot-based voting, lock requirements
Sybil Attack
Many fake accounts
Minimum stake requirements
Collusion
Coordinated voting by insiders
Transparent voting, community monitoring
Protected Parameters
These parameters cannot be changed by governance voting alone:
Launchpad hard thresholds (custody, audit, disclosure)
Protection band emergency triggers
Supply cap (10B PAIMON)
Core safety mechanisms
Smart Contract Security
Audit Status
All core contracts will undergo comprehensive security audits before mainnet deployment. The audit process includes:
Pre-audit: Internal code review and testing
Primary audit: Engagement with a reputable security firm
Remediation: Address all identified issues
Re-audit: Verification of fixes
Public disclosure: Full audit reports published
Audit reports will be made publicly available upon completion. Subscribe to our official channels (X, Telegram) for audit announcements.
Bug Bounty Program
Critical
$50K - $500K
High
$10K - $50K
Medium
$2K - $10K
Low
$500 - $2K
Pre-IPO SPV Risks (xSPCX / pSPCX)
In addition to the Prime Vault risks above, holders of pre-IPO SPV tokens should understand:
Single-issuer concentration
xSPCX value tracks one underlying SPV (today: SpaceX). Idiosyncratic events at the issuer fully reflect into the token
Diversify across products / venues; do not size positions assuming PP-style portfolio cushion
SPV-administrator solvency
The off-chain SPV is a separate legal entity; insolvency or fraud at the SPV administrator can impair the underlying claim
Operational due diligence on SPV partners; documented in drop metadata
Private-market valuation
The underlying private equity has no daily mark-to-market; large bid-ask spreads may emerge
Treat reported NAVs as point estimates, not closing prices
KYC-asymmetric exit
Non-KYC holders can transfer xSPCX freely but cannot redeem to pSPCX. If primary settlement against the SPV becomes the only liquidity venue, non-KYC holders rely on KYC counterparties
Plan exit through xSPCX secondary trading; do not assume primary redemption is available without KYC
Bridge invariant
totalSupply(xSPCX) = locked(pSPCX) × ratio is enforced in TokenBridge, but a UUPS upgrade error or compromised admin key could in principle break the peg
Multi-sig + timelock on UPGRADER_ROLE; on-chain invariant check verifiable by anyone
EIP-3643 agent powers
AGENT_ROLE on pSPCX can freeze, forcedTransfer, pause. Used for compliance enforcement but represents centralization
Multisig agent + event emission; agent actions auditable
Regulatory change
Securities-law treatment of the SPV interest depends on jurisdiction; future changes can affect transferability or holder rights
Geographic disclosure; KYC onboarding restricted to permitted jurisdictions
User Responsibility
Users should understand:
PP is not a stablecoin — NAV fluctuates with underlying assets
Instant liquidity is not guaranteed — Redemptions are subject to quota availability and approval thresholds
Large redemptions require approval — Amounts exceeding thresholds (50K standard, 30K emergency) need keeper approval
xSPCX and pSPCX are not equivalent in legal rights — xSPCX is a tradable mirror; only pSPCX holders have direct settlement rights against the SPV. Conversion requires KYC
KYC onboarding is currently institutional-only — retail wallets should treat xSPCX as their endpoint
Smart contract risk exists — despite audits, bugs are possible
Last updated