Redemptions

ONyc Redemptions Overview

At OnRe, redemptions allow KYC'd holders of ONyc tokens to liquidate part or all of their position in ONyc SA on a structured schedule. Because ONyc operates at the intersection of reinsurance and DeFi, our goal is to introduce greater liquidity to capital that would traditionally remain locked for extended periods.

Primary market redemptions for ONyc are processed digitally through the OnRe platform. OnRe targets reserving up to 15% of underwriting capital to support liquidity needs. Monthly redemption capacity is targeted at up to 2.5% of ONyc SA net asset value (NAV). These figures represent operational targets and may vary based on portfolio conditions and liquidity management.

How Automated Redemptions Work

OnRe’s automated redemption system is designed to provide predictable liquidity while maintaining the stability required for regulated reinsurance underwriting.

The redemption process operates as follows:

1. Eligible investors deposit ONyc tokens into the redemption smart contract.

2. A redemption request is submitted through the institutional portal at https://app.onre.finance/institutional/redeem.

3. The request is recorded onchain and added to a transparent redemption queue.

4. The system estimates an expected execution time based on current liquidity and queue size.

5. Redemptions execute when sufficient USDC or USDG liquidity is available in the contract.

6. Fulfilment occurs at the prevailing ONyc offer price at the time of execution.

7. Upon redemption, the corresponding ONyc is automatically burned.

While waiting in the queue, the investor’s position remains economically active in ONyc SA and continues to reflect the underlying performance of the portfolio.

High-Level Design System

OnRe’s automated redemption infrastructure is built to ensure security, transparency, and operational integrity.

• The smart contract ensures the custody and validity of each redemption request.

• The backend fulfils redemptions at the current ONyc offer price at the time of execution, not at the time of submission.

• All system settings can be adjusted by authorized administrators through a secure interface, with each change logged for full transparency.

• Offer contracts custody both ONyc, USDC, and USDG.

• The backend wallet can execute redemptions but cannot withdraw funds.

• In the event of compromise, risk is limited to queue reordering.

• Before any redemption is executed, the smart contract verifies that sufficient USDC or USDG is available. If not, the transaction reverts with a funding error and remains in Scheduled status.

Risk Considerations

Redemptions carry inherent risks, primarily related to liquidity and continued exposure.

• The available amount of capital may be insufficient to meet redemption requests on an investor’s preferred timeline. If a request cannot be fulfilled immediately, it remains pending in the redemption queue until adequate liquidity becomes available.

• Any portion of a request not redeemed immediately continues to be economically exposed to the performance of ONyc SA until the redemption is processed.

The participation agreement specifies that all redemptions are subject to the Available Amount. If liquidity is insufficient, redemption requests remain pending and will be executed at the prevailing NAV at the time of fulfilment.

FAQs

1

What are ONyc Redemptions?

ONyc redemptions allow eligible token holders to exchange ONyc tokens for USDC or USDG through OnRe’s primary redemption facility. This mechanism provides liquidity to investors while maintaining the capital stability required for underwriting reinsurance risk.

2

What tokens can I receive when redeeming?

Redemptions can currently be settled in USDC or USDG, depending on the liquidity available in the redemption contract.

3

Who can redeem ONyc?

Redemptions are available to verified ONyc holders who have completed OnRe’s KYC process and meet accredited investor requirements.

Investors who acquired ONyc through the primary market are already verified. Users who acquired ONyc on secondary markets must complete OnRe’s AML/ATF procedures before submitting a redemption request.

Redemption payouts can only be sent to wallets that were verified during onboarding.

4

How do I request a redemption?

Eligible users can submit redemption requests through the institutional portal at https://app.onre.finance/institutional/redeem.

To request a redemption:

1. Deposit ONyc tokens into the redemption smart contract

2. Submit a redemption request through the application

3. The system will estimate an expected execution time based on available liquidity

All redemption requests are recorded onchain and added to a transparent queue.

5

When will my redemption be processed?

Redemptions are processed when sufficient USDC or USDG liquidity is available in the redemption contract.

OnRe targets:

• Reserving up to 15% of underwriting capital to support redemptions

• Weekly redemption capacity of up to 2.5% of ONyc SA’s NAV

Because requests are constrained by available liquidity, the application provides an estimated redemption timeline when the request is submitted.

6

Are redemptions processed immediately?

Not always. If sufficient liquidity is available, redemptions may execute quickly. If liquidity is temporarily unavailable, the request remains in the queue until capital becomes available. The redemption queue ensures requests are processed in a transparent and orderly manner.

7

What happens if my redemption request exceeds available liquidity?

If the available liquidity is insufficient to fulfil the entire request immediately, the request remains in the redemption queue until sufficient capital becomes available.

8

What happens while my redemption request is waiting?

While a request is pending, the position continues to be economically exposed to ONyc SA’s performance until processed. This means the value of the position continues to move in line with ONyc’s underlying portfolio performance until the redemption is executed.

9

What price will my redemption be executed at?

Redemptions are executed at the prevailing ONyc offer price at the time of fulfilment, not the price at the time the request was submitted. This ensures all redemptions are settled using the most current net asset value of ONyc.

10

What happens to the ONyc once redemption is executed?

ONyc is programmatically burned by the smart contract upon redemption, with all related transfers executed atomically within the same transaction.

11

Is there a fee for redemptions?

OnRe charges a 25 basis point (0.25%) fee on fulfilled redemption requests processed through the online application. Fees may change over time.

12

Is there a limit to how much I can redeem?

Individual redemption requests are not subject to a fixed size limit. However, total weekly redemption capacity is constrained by the Available Amount, which depends on liquidity and portfolio management considerations.

Large redemption requests may therefore take longer to process than smaller ones.

13

Why does ONyc have redemption limits?

Because ONyc capital supports regulated reinsurance underwriting, liquidity must be managed carefully to maintain portfolio stability while providing investor access to redemptions.

14

What happens if liquidity is temporarily unavailable?

If the redemption contract does not hold sufficient USDC or USDG to process a request, the redemption remains pending in the queue until liquidity becomes available. The smart contract automatically verifies liquidity before executing each redemption.

15

Can I cancel a redemption request?

Users may cancel pending redemption requests before they are executed. Once a redemption has been fulfilled, it cannot be reversed.

16

Where are redemption requests stored?

All redemption requests are recorded onchain, providing a transparent and auditable record of the redemption queue.

17

How secure is the redemption system?

The redemption infrastructure includes multiple safeguards:

• Smart contracts custody ONyc, USDC, and USDG

• Backend systems cannot mint or withdraw funds

• Backend permissions are restricted to executing valid redemption requests

• Administrative changes are logged and auditable

Even in the event of backend compromise, the primary risk is limited to queue reordering rather than loss of funds.

18

What if I am not eligible for primary redemptions?

If a user has not completed KYC or does not meet accredited investor requirements, redemptions through the primary facility are not available.

In this case, secondary market liquidity remains the available exit option.