# CapStone

> kUSD is a spendable dollar. Portfolio risk is sold as dated Bonds, so Liquid holders do not carry it.

The balance sheet is U + A ≡ L + B + E: reserve plus the portfolio equals Liquid kUSD plus Bonds plus Equity. Loss hits Equity first, then Bonds, and the Liquid holder last.

The site is a single page. Every section below is server-rendered in that page and addressable by its
fragment, so a section can be cited directly.

## The page, in order
- [Portfolio risk is sold, not shared](https://capstone.tokenisys.com/#principle): Risk in a stablecoin's backing should be bought by an investor who chooses to carry it, rather than passed automatically to every holder of the currency.
- [Reserve, portfolio, three ranked claims](https://capstone.tokenisys.com/#book): The reserve stands apart from the portfolio. Liquid kUSD is senior on the reserve. Bonds, then Equity, take the portfolio's risk.
- [Liquid, Bonds, and Equity](https://capstone.tokenisys.com/#parts): Issue Liquid kUSD, Stake a Bond, Portfolio custody, Equity, Equity controls, Supply expansion, The waterfall, The 90-day cycle, What is fixed.
- [Canton and EVM, same economics](https://capstone.tokenisys.com/#where): Canton Network: DAML, private to the parties. EVM: Base Chain (Solidity), public ledger.
- [Contact](https://capstone.tokenisys.com/#enquiries): A briefing on kUSD, CapStone, or other Tokenisys products.

## Questions
### Is Liquid kUSD redeemable for USDC?
Not on demand. The USDC reserve fully backs Liquid kUSD, and only a liquidation pays that out. A partial tender at par (one kUSD for one USDC) can run on its own, but only when the Bond book is below half the reserve.

### Do Liquid holders earn a return?
Yes. Bondholders pay Liquid holders a daily carry for use of their balance sheet. Liquid holders do not share in portfolio profit.

### Can a Bond be redeemed before expiry?
No. You can sell a Bond. You cannot redeem it until it matures.

### Are longer Bonds junior to shorter ones?
No. All Bonds rank together. A longer date is a longer term, not a junior claim. In a wind-down they are paid as one class.

### What stops a manager marking its way out of a loss?
Holdings are read from custody, not from the manager. A manager has the authority to invest or trade. Marking is an independent function: it is read from the contract where that is possible, and otherwise posted in public for anyone to verify.

### Can Equity withdraw ahead of a bad cycle?
No. Equity can take capital only after the cycle has settled, and only the surplus above the capital test. A later mark cannot raise that amount. Equity cannot skip a payment to seniors and withdraw in the same cycle.

### What happens in a wind-down?
The path is fixed in advance. Equity can call it once settlement has closed, and cannot take it back. Liquid kUSD is paid first from the reserve. The portfolio is then sold. Bonds are paid next, and Equity takes whatever is left.

### Does it have to be a dollar?
No. kUSD is in dollars. A separate instance can run in another currency, with its own reserve, assets, Bonds and Equity. They do not share a balance sheet.

### What information is available?
Specifications, conformance evidence and whitepapers can be shown under confidentiality.

### Is kUSD open source?
No. Tokenisys builds the smart contracts under a proprietary licence. The contracts are readable; they are not open source. Commercial licences may be granted.

## Reference
- [The page in full, plain text](https://capstone.tokenisys.com/llms-full.txt)

## Notes
- CapStone is a product of Tokenisys (https://tokenisys.com), a trading name of The Dark Sole Enterprise Ltd.
- CapStone and kUSD are not interchangeable: CapStone is the architecture, kUSD is the first instrument built on it.
- Nothing on this site is investment advice.