Impairment v1 disclosures

Public behavior summary for CreatorOVault impairment side-pocketing v1 (new vault launches on module storage v3).

What v1 does

• Keeps one fungible ERC-4626 share for clean-book operations.
• Uses trip-boundary snapshots to lock recovery rights for impaired epochs.
• Uses non-transferable v1 claims (epoch-scoped).
• Uses realized-only recovery accounting through CreatorORecoveryEscrow.
• Excludes finalized impaired strategies from clean-book totalAssets().

What v1 does not do

• No transferable claims.
• No claim-aware pass-through adapters for wrappers/lending markets.
• No onchain historical share checkpoints for eligibility (Merkle-root snapshot flow in v1).

Critical user disclosure

If another contract holds your shares at tripBlock (wrapper, lending market, pooled integration), that contract receives claim rights in v1. The vault does not infer beneficial ownership across external integrations.

Trust boundaries

• Guardian/emergency roles may trip impairment to protect users.
• Trip/finalize cannot assign discretionary impaired NAV to the clean book.
• Recovery distribution is limited to epoch claims and realized inflows.

Settlement and flow behavior

• During Suspect mode:
  • deposit / mint revert.
  • withdraw / redeem revert.
  • maxDeposit / maxMint / maxWithdraw / maxRedeem return 0.
• Claims cannot mint before root finalization.
• Finalization cannot occur before challenge-window unlock.

Claim and recovery caps

Guards from the June 2026 audit pass (C-2 / C-3 / H-1), enforced on-chain by CreatorOVaultCoreModule and CreatorORecoveryEscrow:

• Mint cap (C-2). Cumulative claims minted for an epoch never exceed the epoch’s totalClaimSupply. A proposed root whose leaves sum past the cap reverts with ClaimSupplyExceeded once the cap is reached — no silent dilution of honest claim holders.
• Epoch-scoped escrow accounting (C-2). CreatorORecoveryEscrow rejects any claim that would push claimedByEpochAsset past recoveredByEpochAsset for that epoch/asset (ClaimExceedsRecovered). One epoch’s claims cannot drain recoveries notified for another.
• False-alarm trips destroy the claim surface (C-3). clearImpairmentTrip zeroes the epoch’s snapshotRoot, totalClaimSupply, and recoveryAsset and resets the challenge-window state. Cleared epochs cannot mint claims or receive recovery notifications (ImpairmentRootRequired). Legitimate post-finalize Resolved epochs keep their root and stay claimable.
• Recovery notification guards (H-1). notifyImpairmentRecovery reverts on zero amounts. When the recovery asset is the creator coin, transfer uses tracked-balance accounting so clean-book totalAssets() immediately reflects the escrowed outflow (no double counting between vault book and escrow).

Release notes template text

Use the following text in release communication:

1. v1 introduces impairment epochs with trip-boundary snapshots and non-transferable claim rights.
2. clean-book ERC-4626 operations resume after impairment finalization.
3. realized recoveries are paid through epoch claims; recoveries are not merged back into clean NAV.
4. integrations holding vault shares at snapshot block receive contract-level claims unless claim-aware adapters are added.