A payer opens a Fare on a dead token, holders burn their bags against a published Roll of proven losses, and the budget is streamed to them pro rata to their loss.
1. A token dies#
A token is dead when it has had no trade for a set time, or when its price has stayed at least 95% below its all-time high for that time. On mainnet the target is 7 days; on testnet it is 10 minutes. The check is on-chain. See Dead-token rules.
2. The Roll is computed#
Anyone can compute the Roll of a dead token at a block in the past. It reads only public logs: the token's Transfer events and its curve's Trade and Rug events. For each wallet it keeps a balance and a cost basis in HYPE, then compares the cost with what the bag is worth at the snapshot. The positive differences are proven losses. They are hashed into a Merkle tree. See The Roll.
3. A payer opens a Fare#
The payer deposits a budget and sets the rules: the dead token, the snapshot, the max rate per HYPE lost, the cap per wallet, the window, the vesting and the optional Stay clause. The Merkle root of the Roll is stored with the Fare. 3% of the budget goes to the fee vault. See Fares.
The Fare is first Pending for a dispute period. During that time anyone can recompute the Roll and check the root; the app shows Roll verified or Roll mismatch. The payer may cancel and get the whole budget back, fee included.
4. Holders cross#
When the Fare is Open, a holder whose wallet is in the Roll burns all or part of the bag recorded for it and submits the Merkle proof. The burn is irreversible. The counted loss is the proven loss times the share of the bag burned, capped per wallet. See Crossing.
5. Settlement#
After the window anyone can settle. The rate is the budget left after the fee divided by the total counted loss, never above the max rate. Each wallet is entitled to its counted loss times the rate. What is not allocated returns to the payer.
6. Streaming#
Payouts are streamed linearly over the vesting period from settlement. Holders claim whenever they want. With the Stay clause, a wallet that sold what it already received loses the rest of its stream to the payer.
The example#
$CAT opens a Fare on $DOG: 1,500,000 $CAT, 30-day vesting. Burners total 300 HYPE of proven loss, so the rate is 5,000 $CAT per HYPE lost.
| Wallet | Bag held | Paid for it | Bag value | Proven loss | Receives | Share in a snapshot airdrop |
|---|---|---|---|---|---|---|
| Lina, late buyer | 6M $DOG | 1.2 HYPE | 0.05 HYPE | 1.15 HYPE | 5,750 $CAT | 1x |
| Block-1 sniper | 50M $DOG | 0.3 HYPE | 0.42 HYPE | 0 | 0 | 8.3x |
Round numbers. The 3% protocol fee is left out of the example.
Lina bought late and paid 1.2 HYPE for a bag now worth 0.05 HYPE. Her proven loss is 1.15 HYPE, and at 5,000 $CAT per HYPE she receives 5,750 $CAT, streamed over 30 days.
The block-1 sniper holds a bag 8 times larger, but paid 0.3 HYPE for something still worth 0.42 HYPE. There is no loss, so there is no payout. In a snapshot airdrop by balance the sniper would have taken 8.3 times Lina's share.
The example keeps round numbers and leaves the protocol fee out. In the contract, 3% of the budget goes to the fee vault at opening, so a 1,500,000 $CAT budget leaves 1,455,000 $CAT to share. With 300 HYPE of counted loss and no binding max rate, that is 4,850 $CAT per HYPE lost.
Who pays what#
| Party | Gives | Gets |
|---|---|---|
| Payer | A budget in any ERC-20 or WHYPE, 3% of it as fee | New holders who lost on a token like theirs; unallocated budget back |
| Holder | A dead bag, burned | A stream of the payer's token, pro rata to proven loss |
| Protocol | The market and the rules | The 3% fee, held in the fee vault |