MainSt Intern

Spreading boxes & making memes @Main_St_Finance

[Main Street @Main_St_Finance]

Main Street Liquidity and Recovery Update

We have been evaluating potential ways to accelerate liquidity for holders, including limited early unwinds combined with open-market token purchases and burns.

Economically, this approach may be accretive under the right conditions. Selling selected positions and using the proceeds to purchase tokens below their redemption value could improve overall coverage and potentially allow the recovery process to move more quickly.

However, following the unwind of the more liquid portion of the portfolio, the protocol’s coverage ratio, excluding the insurance fund, is now close to 100.00% based on current valuations and methodology.

Following consultation with counsel, we do not believe it would be appropriate to deliberately undertake transactions that would reduce coverage below this level, even temporarily.

As a result, we are not currently able to execute early unwinds or material buybacks unless they can be completed without compromising coverage.

We have continued working with counsel to assess whether the process can be accelerated while remaining within the appropriate legal, operational and risk parameters.

Based on the current maturity schedule, the first material liquidity from the remaining box positions is expected in just over 30 days.

Assuming the relevant positions settle as expected, the protocol should receive additional liquidity and coverage headroom. At that point, subject to updated coverage calculations, market conditions and any further legal considerations, we intend to begin placing measured limit orders in the open market.

Proposed Buyback Process

Our current intended approach is as follows:

• Limit orders would initially be placed in the open market at varying prices, allowing holders who want earlier liquidity to decide whether to sell into them.

• Tokens purchased by the protocol through this process would be burned or otherwise permanently removed from circulating supply.

• Any improvement in coverage resulting from purchases below redemption value would be assessed before additional liquidity is deployed.

• Where coverage permits, we would evaluate whether selected box positions could be unwound early without reducing coverage below the required level.

• We do not presently intend to enter into private bilateral purchase arrangements. Initial purchases would be made through the market so that available liquidity is accessible to holders on equal terms.

We understand that many holders would prefer faster liquidity and that some holders have approached us with offers to sell at a discount.

Although we would like to accommodate these requests sooner, any action must remain consistent with the protocol’s coverage requirements and the applicable legal and operational framework.

We will continue evaluating opportunities to accelerate the process where they can be implemented responsibly and without adversely affecting the overall position of holders.

Morpho Redemption Process

We are also developing changes intended to support a fair and orderly resolution of the affected Morpho market.

Under the existing structure, a recovery in market pricing or liquidity could create a first-come, first-served outcome. Liquidations would become profitable for liquidators as msUSD/msY peg improves via buybacks.

This will create a situations where users able to withdraw first could potentially receive a disproportionate benefit while other lenders remain unable to withdraw, due to the accrued interest which is significant due to the market being at 100% utilisation for an extended period of time.

To address this risk, the proposed design would restrict transfers of the msY held inside the affected Morpho contracts and introduce a dedicated redemption mechanism for the associated Morpho positions.

The objective is to prevent outcomes from being determined solely by withdrawal timing and to establish a more equitable process for affected lenders. This avoids a first come first serve race to the exits where early exiting users end up with extremely high APY on their lending positions whilst others are permanently left trapped in the vault/market.

This restriction would apply specifically to msY held within the affected Morpho structure. It is not intended to restrict the transferability of msY held elsewhere.

The proposed design remains subject to final legal, technical and security review. It will require contract development, testing and an independent audit before implementation.

The precise mechanics, eligibility requirements and redemption process will be published before the system becomes operational.

Summary

Our priority remains protecting the overall position and treating holders fairly.

Current coverage levels limit the amount of liquidity that can be deployed immediately. The first material maturity from the remaining portfolio is expected in just over 30 days.

Assuming settlement occurs as expected, this should provide additional liquidity and flexibility to begin measured open-market purchases.

Any subsequent purchases or early unwinds will depend on realized liquidity, updated coverage calculations, prevailing market conditions and applicable legal and operational considerations.

We will provide further updates as we approach the first material maturity and as the proposed buyback and Morpho redemption processes progress.

All dates, transaction sizes and proposed actions described above represent current estimates or intentions and should not be treated as guarantees. Actual timing and outcomes may change due to settlement, market, technical, legal or operational factors.

Thank you for your continued patience.

[Main Street @Main_St_Finance]

Mainstreet Update — Morpho, Proof of Reserves & Liquidity

We want to address the current situation around the Mainstreet Morpho market and provide clarity.

First and most importantly: Mainstreet remains fully backed.

The recent shutdown of our third-party proof-of-reserves dashboard does not reflect any loss of assets or deterioration in portfolio quality. This is an infrastructure and reporting issue, not a solvency issue.

As a result of the dashboard going offline, the oracle supporting the Morpho market is expected to pause within the next 24 hours. This has created understandable concern and triggered elevated borrowing rates as leveraged loopers rush to unwind positions.

We are actively responding on multiple fronts:

Engaging alternative proof-of-reserves providers to restore independent verification as quickly as possible.

Continuing to unwind box spread positions and redeploy liquidity into the minter / Morpho ecosystem.

Preparing to act as liquidity provider and liquidator of last resort if necessary to prevent disorderly market conditions.

Over the past several days, we have already unwound our shortest-dated box positions and released free cash, with more than $8 million in USDC already transferred to the minter to support liquidity and assist with unwinds.

Mainstreet’s core portfolio consists primarily of box spreads. These are structurally low-volatility positions designed to converge to fair value at expiry, making them highly predictable from a NAV perspective when held to maturity.

However, box spreads are not always frictionless to exit early.

Selling before expiry may involve:

Transaction fees
Wider bid/ask spreads
Temporary market-maker discounts
Liquidity-dependent haircuts based on expiry and position size

This means that while our portfolio remains fully backed, converting positions into immediate liquidity depends on prevailing market depth and market-maker appetite.

Our priority is clear: protect NAV while maximizing liquidity for the protocol.

We are willing to accept elevated fees and modest execution costs to accelerate liquidity release, supported by the protocol insurance fund. However, we will not realize losses beyond the insurance fund purely to force immediate exits. If market pricing becomes materially irrational, we will allow positions to continue toward expiry and realize full value at settlement, as outlined in our risk disclosures and discussions with key partners.

If borrowing rates continue to rise and liquidations occur, Mainstreet is prepared to step in as liquidator of last resort. As additional USDC is freed from box maturities and unwinds, part of that capital may be deployed to absorb and liquidate stressed Morpho positions to minimize bad debt risk.

Weekend liquidity is currently limited, and market-maker quotes are materially less favorable than during normal trading hours, which temporarily slows execution. We expect to have a clearer picture over the coming days and will continue providing updates as progress is made.

We understand this is a stressful situation and sincerely appreciate the community’s patience and trust.

Our commitment remains unchanged: protect user funds, preserve NAV, and restore normal market conditions as quickly and responsibly as possible.

[MainSt Intern @MainStIntern]

@YouAreMyYield

[Gabe @GabeWeide]

Keep shipping. Nice performance. Hopefully $10M soon?

[AlphaPing @0xAlphaping]

$10M soon? Strong end to a great week.

@Main_St_Finance

[AlphaPing @0xAlphaping]

The strong momentum carries into the end of the week despite the aforementioned turbulence.

Our Alpha USDC Delta vault is closing in on $6M. Steady growth.

@Main_St_Finance

[AlphaPing @0xAlphaping]

A very healthy update on Alpha USDC Delta V2, despite wider market turbulence.

$4.1M now deposited.

A USD-denominated vault running delta-neutral strategies across on-chain and structured markets, funding spreads, basis trades, and hedged carry.

@Main_St_Finance

[AlphaPing @0xAlphaping]

Alpha USDC Delta V2 on @Morpho crosses $1M.

USDC lending against $msY collateral. Delta neutral exposure. No directional risk.

Built with @Main_St_Finance.

[AlphaPing @0xAlphaping]

Alpha USDC Delta V2 is currently the highest-yielding USDC vault on @Morpho.

Excited to see it progress alongside the @Main_St_Finance team!

[AlphaPing @0xAlphaping]

Alpha USDC Delta V2 is now live on @Morpho.

Delta-neutral yield through box spread exposure via @Main_St_Finance. Market-neutral by design. No directional risk, yield from the options structure.

Curated by AlphaPing.

[Main Street Monitor @main_st_monitor]

Street Report: Main Street Monitor hired for "The Situation Room."

[Telos Consilium @TelosConsilium]

New research: msY from @Main_St_Finance

CME box spreads → ~10% APY. $22M TVL.

We analyzed:
• Execution stack
• Leverage bounds & stress scenarios
• Redemption mechanics & run risk
• Governance & counterparty concentration

A 30 pages due diligence report is now LIVE 🧵

[DeFi Dad ⟠ defidad.eth @DeFi_Dad]

🙏 Special thx to @Main_St_Finance for sponsoring us!

🏙️ MainStreet brings onchain access to TradFi yield strats, like msY earning yield through CME options box spreads.

🌽 msY is earning 12% APY while PT-msY earns 12.44% APY on @pendle_fi.
https://t.co/aCOJzx0PD3

[Main Street @Main_St_Finance]

Main Street has officially surpassed 30MM TVL!

We are the go-to place onchain for delta neutral yield sourced from the options box spread strategy.

Start earning with Main Street today!

[Main Street @Main_St_Finance]

Main Street msY at a Glance by @stablewatchHQ

TVL: $20.4M (+153%)
msY price: $1.03
30-day average APY: 10.02%
Total yield paid out (30D) (YPO): $84.94k

Track msY on StableWatch here: https://t.co/96MqQaQE5O

[stablewatch @stablewatchHQ]

New Listing: $msY

$msY is a yield token issued by @Main_St_Finance.

$msY leverages a delta-neutral box spreads options strategy on the CME to generate yield.

[Main Street @Main_St_Finance]

New pools live on Uniswap V3 on Ethereum!

Earn rewards by providing liquidity to:

msUSD/msY = 148.5% APR (>170k TVL)
msUSD/USDC = 42.26% APR (>598k TVL)

Links below 👇

[Main Street @Main_St_Finance]

Introducing the msY Vault:
Democratizing Access to Box Spread Yields

[MainSt Intern @MainStIntern]

Our quant was running some tests on the new strat and accidentally broke a few things

[Finance News @ftfinancenews]

Trading on CME halted after exchange hit by data centre outage https://t.co/Y9Avvx3m0x