TownSquare Terms of Use – TS Vault Services

These Terms of Use (this “Agreement”) govern your access to and use of one or more TS Vaults (as defined below) and associated technologies (collectively, the “TS Vault Services”), which are a part of the Services, provided by TownSquare Services Ltd. and/or its affiliates (collectively, “TownSquare,” “we” and “us”). By accessing or using any of the TS Vault Services, you (on behalf of yourself or the entity you represent) acknowledge that you have read, understand, and agree to be bound by this Agreement, including the TownSquare Terms of Use (the “Terms”) and our Privacy Policy. This Agreement is an addendum to and supplements and incorporates by reference the Terms, available at: https://www.townsq.xyz/terms. Therefore, in addition to the terms of this Agreement, the Terms apply to your access to and use of the TS Vault Services, which are a part of the Services referred to in the Terms. Capitalized terms used but not defined herein have the meanings assigned to such terms in the Terms.

This Agreement is a binding contract between you and TownSquare. Your use of the TS Vault Services in any way, including as a User (as defined below), means that you agree to all of the terms of this Agreement, which will remain in effect while you use the TS Vault Services.

Defined Terms

The following defined terms used in this Agreement have the meanings assigned below.

“Account Control Agreement” means a tri-party agreement by and among a User, Custodian, and TownSquare, entered into in connection with the delegation of Digital Assets to the TS Vault Services pursuant to this Agreement, governing access to and contractual control of Digital Assets by TownSquare, including the transfer of Digital Assets from Custodial Vault Accounts to, and the return of Digital Assets from, off-chain Third Party Deployment Venues.

“TownSquare Platform” means the TownSquare blockchain protocol, related technology platform and applications, and related Services provided in respect thereof. For clarity, the TownSquare Platform is a non-custodial blockchain protocol substantially operated through self-executing smart contracts; provided that certain Deployment Activities may be conducted off-chain through Third Party Deployment Venues, as described in this Agreement.

“TS Vault” means an ERC-4626 compliant Vault on the TownSquare Platform used as part of the TS Vault Services to hold, and to route and deploy Synthetic Tokens in Deployment Activities. Each TS Vault corresponds on a 1:1 basis with the aggregate amount of Digital Assets held in Custodial Vault Accounts (including Digital Assets that are then Off-Chain Allocated Assets).

“Custodial Vault Account” means a User’s blockchain account hosted and custodied by Custodian and accessed by a User through the Custodian Platform, designed to hold the User’s Digital Assets, correlated to Synthetic Tokens that will be delegated by the User to TS Vault Services pursuant to this Agreement.

“Custodian” means the third-party qualified custodian responsible for providing custodial services in respect of the Digital Assets stored in a Custodial Vault Account.

“Custodian Platform” means Custodian’s platform(s) (including related websites, applications, user interfaces, etc.) that are designed to provide custodial, management and other services relating to Digital Assets to Users.

“Depeg Event” means, for any Digital Asset that is a stablecoin, an event or period of time whereby such Digital Asset fails to maintain a strict 1:1 value relative to its reference asset on a consistent, observable market basis.

“Deployment Activities” means the (i) routing, allocation, or deployment of Synthetic Tokens held in a TS Vault (including, where applicable, any assets, collateral, or positions acquired with, converted from, or posted using such Synthetic Tokens) to or through on-chain Third Party Deployment Venues, and (ii) transfer of Digital Assets from Custodial Vault Accounts to, and deployment of Off-Chain Allocated Assets through, off-chain Third Party Deployment Venues, in each case for yield and reward generation purposes and in yield, trading, hedging, arbitrage, or other investment strategies with specific risk parameters, as described in the Documentation.

“Digital Asset” means a digital representation of value that may function as a medium of exchange or medium for investment, and which is evidenced on, and can be electronically received and stored using distributed ledger technology, and that is included in the list of digital assets and tokens that are eligible to be delegated to TS Vault Services as set forth in the Documentation and on the TownSquare Platform as determined by TownSquare (e.g., BTC, ETH). For clarity, as used herein, the term “Digital Assets” does not refer to Synthetic Tokens.

“Documentation” means all manuals, training materials, guides, product descriptions, product specifications, technical manuals, supporting materials, and other information relating to the TS Vault Services and provided or otherwise made available by TownSquare, including the documentation available here: http://docs.townsq.xyz/.

“Excluded Conduct” means, with respect to any Strategy Party, (i) fraud, (ii) gross negligence, (iii) willful misconduct, or (iv) a material breach by such Strategy Party of its obligations under this Agreement or any other written agreement between such Strategy Party and you relating to the TS Vault Services (including, in the case of the Vault Curator, a material breach of the strategy mandate, investment guidelines, or risk parameters applicable to a TS Vault as set forth in the Documentation), in each case as determined by a final, non-appealable judgment of a court or award of an arbitral tribunal of competent jurisdiction.

“Liquidity Distribution Platform” means any third-party platform, application, interface, marketplace, aggregator, or other distribution channel through which liquidity or Digital Assets may have been sourced, routed, or distributed to a TS Vault, or through which access to a TS Vault may have been made available to Users.

“Major Event” means an event affecting a Third Party Deployment Venue caused by a circumstance beyond the reasonable control of such Third Party Deployment Venue, including, but not limited to natural catastrophes, fire, explosions, pandemic or local epidemic, war or other action by a state actor, public power outages, civil unrests and conflicts, labor strikes or extreme shortages, acts of terrorism or espionage, Domain Name System server issues, technology attacks (e.g., DoS, DDoS, MitM), cyberattack or malfunction on the blockchain network or protocol, failure or outage of any exchange, trading, custody, or settlement system or other off-chain infrastructure, or governmental action rendering operation illegal or impossible.

“Net Asset Appreciation” means, with respect to any TS Vault for any NAV Period, the excess (if any, and otherwise equal to zero) of (i) the aggregate market value of all Vault Assets of the TS Vault as of the end of such NAV Period, over (ii) the aggregate market value of all Vault Assets of the TS Vault as of the beginning of such NAV Period.

“Net Asset Depreciation” means, with respect to any TS Vault for any NAV Period, the excess (if any, and otherwise equal to zero) of (i) the aggregate market value of all Vault Assets of the TS Vault as of the beginning of such NAV Period, over (ii) the aggregate market value of all Vault Assets of the TS Vault as of the end of such NAV Period.

“Off-Chain Allocated Assets” means Digital Assets that have been transferred from Custodial Vault Accounts to one or more off-chain Third Party Deployment Venues for use in off-chain Deployment Activities, together with any assets, positions, collateral, or proceeds acquired with, posted using, or derived from such Digital Assets, in each case for so long as they are held at or through any off-chain Third Party Deployment Venue.

“Strategy Loss” means any loss, decline in value, drawdown, or negative return incurred in connection with Deployment Activities as a result of the execution or performance of any trading or investment strategy, whether conducted on-chain or off-chain, including losses arising from trading, allocation, rebalancing, or hedging decisions; adverse price movements; position sizing; hedging or basis mismatches; slippage or execution or settlement at unfavorable prices; funding rate or borrowing costs; margin calls or liquidations of positions; impermanent loss; or the underperformance of any strategy, model, or allocation decision.

“Strategy Parties” means TownSquare, the Vault Curator, each Liquidity Distribution Platform, and each of their respective affiliates and their respective officers, directors, members, employees, contractors, and agents (each, a “Strategy Party”).

“Synthetic Token” means, in respect any Digital Asset token that is the subject of this Agreement, a synthetic representation of such Digital Asset token that is minted by the TownSquare Platform for use and deployment on the TownSquare Platform, and bearing substantially the same economic characteristics of such underlying Digital Asset token corresponding thereto, such that the value of one such Synthetic Token at any given time is designed to match the value of such underlying Digital Asset token corresponding thereto on a one-to-one basis. As an example, a BTCts token minted by TownSquare would be a Synthetic Token corresponding to a BTC token held in a Custodial Vault Account.

“Third Party Deployment Venue” means an on-chain or off-chain third party protocol, application, venue, or counterparty, including DeFi protocols and applications (e.g., lending, borrowing, liquidity, money market) and centralized exchanges, over-the-counter (OTC) trading desks, brokers, prime brokers, off-exchange settlement providers, custodians or sub-custodians, and other trading or market counterparties, in each case approved for use in connection with the TS Vault Services and listed in the Documentation and/or on the TownSquare Platform.

“User” means a customer of Custodian holding Digital Assets custodied by Custodian, who has been onboarded as an authorized user of the TownSquare Platform and approved to participate in TS Vault Services through the onboarding process with TownSquare.

“Vault Assets” means, with respect to any TS Vault at any time and without duplication, (i) all Synthetic Tokens held in such TS Vault (with the value of one Synthetic Token being determined as equal in value to one token of the corresponding Digital Asset), other than any Synthetic Tokens corresponding to Digital Assets that are then Off-Chain Allocated Assets, and (ii) all Off-Chain Allocated Assets attributable to such TS Vault, valued as described in the Documentation.

“Vault Curator” means, with respect to any TS Vault, the person or entity (which may be TownSquare, an affiliate of TownSquare, or a third party) appointed to design, manage, allocate, rebalance, or execute the Deployment Activities of such TS Vault, as identified in the Documentation and/or on the TownSquare Platform.

“VRT” means a Vault Receipt Token, which is a tokenized representation of a “vault share” in respect of a certain TS Vault.

TS Vault Services

As part of the TownSquare Platform and TS Vault Services, TownSquare may from time to time establish one or more TS Vaults, which may be made available to certain qualified and approved Users who agree to comply with the terms of this Agreement.

Each TS Vault is associated on a 1:1 basis with corresponding Custodial Vault Accounts established and made available to Users through the Custodian Platform that hold Digital Assets delegated to the TS Vault. Digital Assets held in Custodial Vault Accounts are custodied by Custodian and, except to the extent transferred to off-chain Third Party Deployment Venues as Off-Chain Allocated Assets (as described under “Off-Chain Deployment” below), are not deployed to the market in Deployment Activities. However, upon execution of an Account Control Agreement, Digital Assets held in Custodial Vault Accounts serve as collateral for Synthetic Tokens that are deployed to on-chain Third Party Deployment Venues for yield generating purposes in Deployment Activities as part of the TS Vault Services.

Qualified Users that are customers of Custodian and who are approved to participate in TS Vault Services may elect to transfer Digital Assets owned by them and custodied by Custodian to a Custodial Vault Account for the purpose of earning yield through the TS Vault Services. Yield in respect of such Digital Assets (if any) is earned indirectly through the yield generating Deployment Activities of Synthetic Tokens and, where applicable, Off-Chain Allocated Assets, as further described herein and in the Documentation.

The TS Vault Services and the related delegation and withdrawal processes are designed to work as outlined below.

Delegation

A User that wishes to participate in TS Vault Services for yield can transfer their Digital Assets to a Custodial Vault Account for the opportunity to earn yield indirectly through the deployment of corresponding Synthetic Tokens, pursuant to the following processes.

As an initial step in the process, the User is required to deposit Digital Assets through the Custodian Platform to a Custodial Vault Account, and to enter into an Account Control Agreement with Custodian and TownSquare relating to such Custodial Vault Account. Each Custodial Vault Account is set up to permit TownSquare to (1) access and view the contents of such Custodial Vault Account at all times, and (2) exercise contractual control (through the Account Control Agreement) over the Digital Assets contained therein from and after the delivery of a VRT to the User and for the duration of the time that the User holds such VRT (as described further below) to provide the TS Vault Services. For TS Vaults whose Deployment Activities include off-chain strategies, such contractual control includes the right to instruct Custodian to transfer Digital Assets from the Custodial Vault Account to, and to receive Digital Assets back from, off-chain Third Party Deployment Venues, as described under “Off-Chain Deployment” below.

The User may then access the TownSquare Platform using its TownSquare account credentials. Depending on the particular Digital Asset initiative eligible for TS Vault Services, the User may be assigned to the specific TS Vault available for such initiative. For certain initiatives, the User may have the opportunity to identify and select an available TS Vault among multiple options that the User is eligible to participate in. A description of each available TS Vault, including the anticipated yield and applicable Deployment Activities, is made available on the TownSquare Platform and in the Documentation.

Upon selection of (or assignment to) a TS Vault, the User will be prompted to (1) affirmatively confirm (at the User’s discretion) that the User agrees to enter into and be bound by this Agreement and (2) affirmatively elect (at the User’s discretion) to “delegate” its Digital Assets to the TS Vault Services in respect of the selected TS Vault. Upon affirmatively electing to delegate its Digital Assets, the User is bound by this Agreement.

The User’s election to delegate its Digital Assets to the TS Vault Services calls a function that programmatically causes the minting of a number of Synthetic Tokens that correspond to the number of such Digital Assets on a 1:1 basis. Such Synthetic Tokens are then delivered to the TS Vault selected by (or assigned to) the User in the delegation process for further deployment on-chain in Deployment Activities. No User will have any direct or indirect interest in or rights in respect of any Synthetic Tokens or any TS Vault, and at no time will any User own, control, have access to, or have custody of, any Synthetic Tokens, other than a User’s rights to hold and use a VRT in accordance with this Agreement (as further discussed below).

Additionally, following the User’s election to delegate Digital Assets and the 1:1 minting and delivery of corresponding Synthetic Tokens, TownSquare will deliver to the User (to its Custodial Vault Account or another approved account) a VRT relating to such Digital Assets delegated to the TS Vault Services and the corresponding Synthetic Tokens minted and delivered to the corresponding TS Vault. Each VRT is subject to this Agreement (and to any applicable policies and agreements of Custodian), and shall not be transferrable other than in connection with a Withdrawal (as set forth below). The VRT allows a User to track its interest in the delegated Digital Assets, including any allocable accrued yield and Qualified Losses.

Upon delivery to the User of the VRT, TownSquare will instruct Custodian to effect the delegation of the Digital Assets held in the Custodial Vault Account that corresponds on a 1:1 basis with the applicable TS Vault selected by the User in the delegation process.

You acknowledge and agree that the Digital Assets you delegate to the TS Vault Services (held in your Custodial Vault Account) serve as collateral for the corresponding Synthetic Tokens minted and deployed in Deployment Activities and for your obligations under this Agreement (including with respect to Qualified Losses). You further acknowledge and agree that, pursuant to the Account Control Agreement, TownSquare or its affiliate has been granted and will hold (for so long as you hold a VRT) a security interest in such Digital Assets and related rights, and TownSquare may exercise its contractual control rights with respect to such Digital Assets in accordance with the Account Control Agreement and this Agreement (including in connection with delegations, Withdrawals, and Qualified Losses). You agree that you shall not create, incur, assume, or permit to exist any lien, security interest, or other encumbrance on any Digital Assets held in the Custodial Vault Account, other than the security interest of TownSquare described herein, except as permitted by the Account Control Agreement. You agree to take all further action that may be necessary or desirable, or that TownSquare may reasonably request, to perfect and protect any security interest granted or purported to be granted hereby or under the Account Control Agreement or to enable TownSquare to exercise and enforce its rights and remedies hereunder or under the Account Control Agreement with respect to any such collateral. Furthermore, you acknowledge and agree that a VRT is solely a tracking mechanism and evidence of your economic position and redemption right under this Agreement, and does not represent any ownership interest in, or right to possess, control, or direct the use of, any Synthetic Tokens, any Off-Chain Allocated Assets, any account at any Third Party Deployment Venue, or any TS Vault.

Deployment Activities

Synthetic Tokens corresponding to delegated Digital Assets will be deployed in on-chain Deployment Activities, and Digital Assets may be allocated to off-chain Deployment Activities (as described under “Off-Chain Deployment” below), in each case associated with the applicable TS Vault, as described in the Documentation and on the TownSquare Platform. Each User is responsible for reviewing all such information and descriptions of applicable Deployment Activities prior to delegation of any Digital Assets, and each User assumes all risk (including all Strategy Losses) in respect of such Deployment Activities as they pertain to such User’s delegated Digital Assets.

On-chain Deployment Activities are conducted programmatically through smart contracts governing deployment and routing of assets held for use in a TS Vault. In certain cases, the Vault Curator may facilitate such deployment by, e.g., calling a function to rebalance asset deployment to third party DeFi platforms in response to market developments or yield performance. Off-chain Deployment Activities may be conducted by the Vault Curator, TownSquare, or their respective designees through accounts, mandates, or other arrangements with off-chain Third Party Deployment Venues (such as centralized exchanges, OTC trading desks, brokers, or off-exchange settlement providers), and may involve the transfer of Digital Assets from Custodial Vault Accounts to such venues and their return, the execution of trades or other transactions off-chain, and the reporting of positions and results to the TS Vault through the reconciliation, attestation, or reporting processes described in the Documentation.

Deployment Activities involve routing and deploying Synthetic Tokens held in a TS Vault to one or more Third Party Deployment Venues, transferring Digital Assets to off-chain Third Party Deployment Venues, and interacting with smart contracts and other third-party systems that are not owned, operated, or controlled by TownSquare. Such Third Party Deployment Venues are subject to risks inherent in decentralized finance, on-chain protocols, and off-chain trading venues and counterparties, including smart contract vulnerabilities, exploits, or failures; oracle failures, manipulation, or inaccuracies; governance attacks or adverse governance actions affecting protocol parameters or operations; liquidity constraints or sudden reductions in available liquidity; protocol insolvency or cessation of operations; bridge, cross-chain messaging, or interoperability failures; the actions or inactions of other participants in such protocols; and, in the case of off-chain Third Party Deployment Venues, counterparty default or insolvency, the freezing, suspension, or restriction of accounts, assets, or withdrawals, custody or sub-custody failures, operational, settlement, or reconciliation errors, margin calls and forced liquidations, and the limited transparency of off-chain positions, any of which may result in losses of Synthetic Tokens or Off-Chain Allocated Assets, reduced or eliminated yield, delayed rebalancing or unwind, or delays or limitations on Withdrawals. In addition, certain Deployment Activities may rely on wrapping, bridging, or other cross-chain processes or infrastructure, which may fail or be compromised and may result in loss, delay, or impairment of assets or positions. TownSquare does not guarantee the performance, security, availability, or continued operation of any Third Party Deployment Venue, and TownSquare and/or the Vault Curator may, in its or their sole discretion, modify, rebalance, pause, or discontinue Deployment Activities or the use of any Third Party Deployment Venue for risk management, operational, legal, or other reasons, which may adversely affect yield (if any) and the timing and mechanics of Withdrawals. Each User assumes all risks associated with Deployment Activities and Third Party Deployment Venues as they relate to such User’s delegated Digital Assets. Without limiting the foregoing, Strategy Losses and all other Qualified Losses are borne by Users as set forth under “Loss of Collateral” below.

Off-Chain Deployment

Where the Deployment Activities of a TS Vault include off-chain strategies, as indicated in the Documentation and/or on the TownSquare Platform, TownSquare may, pursuant to the Account Control Agreement, instruct Custodian to transfer a portion of the Digital Assets held in the Custodial Vault Accounts corresponding to such TS Vault to one or more accounts at off-chain Third Party Deployment Venues (including centralized exchanges) or to off-exchange settlement or similar arrangements, for deployment as Off-Chain Allocated Assets in off-chain Deployment Activities. Off-Chain Allocated Assets are allocated ratably among all Users of the applicable TS Vault in proportion to their VRTs. The off-chain Third Party Deployment Venues used by a TS Vault, and any limits on the portion of a TS Vault’s assets that may be allocated off-chain, are described in the Documentation.

For so long as any Digital Assets are Off-Chain Allocated Assets, the Synthetic Tokens corresponding to such Digital Assets will not be deployed in on-chain Deployment Activities and will be held, restricted, or burned and re-minted as described in the Documentation, such that no Synthetic Tokens are deployed on-chain without corresponding Digital Assets held in a Custodial Vault Account. Off-Chain Allocated Assets (including any yield or losses thereon) are returned to Custodial Vault Accounts from time to time as described in the Documentation, including in connection with rebalancing, risk management, and Withdrawals.

You acknowledge and agree that, while Digital Assets are Off-Chain Allocated Assets: (i) they are not held by Custodian or in a Custodial Vault Account and do not benefit from the custodial arrangements, protections, or segregation provided by Custodian or under the Account Control Agreement; (ii) they may be held in accounts in the name of TownSquare, the Vault Curator, or their respective designees, on a pooled or omnibus basis with the assets of other Users, and may not be segregated by User; (iii) you will have no account with, direct ownership interest in, or claim against any off-chain Third Party Deployment Venue, and your interest in Off-Chain Allocated Assets is solely the contractual interest represented by your VRT under this Agreement; (iv) they are subject to the risks of the applicable off-chain Third Party Deployment Venue, including insolvency, hacks, account freezes, withdrawal restrictions, and regulatory action, and any resulting loss is a Qualified Loss borne by Users in accordance with this Agreement; and (v) their return to Custodial Vault Accounts may be subject to position unwind periods, venue withdrawal limits, and transfer delays, which may delay Withdrawals.

Yield

Users of TS Vault Services are eligible to earn yield on their Digital Assets that are held in a Custodial Vault Account, through the deployment of corresponding Synthetic Tokens in Deployment Activities. Yield allocable to a User’s Digital Assets held in a Custodial Vault Account is derived indirectly on a ratable basis from yield earned from Deployment Activities on the corresponding Synthetic Tokens in a corresponding TS Vault. Where the Deployment Activities of a TS Vault include off-chain strategies, such yield is also derived from Deployment Activities in respect of Off-Chain Allocated Assets.

Each TS Vault is associated with a maximum annual percentage rate (APR) applicable to such TS Vault on a quarterly basis (each, a “Quarterly Vault APR”). The then-current Quarterly Vault APR applicable to a TS Vault is made available to Users at the delegation interface through the TownSquare Platform. The Quarterly Vault APR for a TS Vault is applicable and effective for that TS Vault on a quarterly basis for the duration of a calendar quarter, and is subject to change in subsequent quarters. Any changes to the Quarterly Vault APR from the prior quarter will be made available to Users through the TownSquare Platform at least seven days prior to the start of the subsequent calendar quarter for which such new Quarterly Vault APR will take effect.

For a given TS Vault, the Quarterly Vault APR is set in advance for each quarterly period as a function of the Deployment Activities applicable to such TS Vault and the anticipated yield to be generated therefrom.

Users are eligible to earn up to the applicable Quarterly Vault APR for a TS Vault on their Digital Assets that are held in a Custodial Vault Account through the deployment of corresponding Synthetic Tokens in Deployment Activities during the applicable quarterly period. Such yield is prorated for the period of time that such Digital Assets are continuously held in such a Custodial Vault Account (or allocated as Off-Chain Allocated Assets) and corresponding Synthetic Tokens are used in Deployment Activities during such quarterly period (i.e., after initial delegation and before Withdrawal, if applicable). Yield amounts allocable to a User’s delegated assets accrues programmatically on a periodic basis, and is tracked by the User’s VRT corresponding to such delegated assets. Any accrued net yield allocable to a VRT in respect of delegated assets is paid in kind to a User upon Withdrawal of such Digital Assets. Accrued yield in respect of delegated assets is calculated on a periodic basis and Users can access and view their accrued yield on the TownSquare Platform through their VRT.

As a User, you acknowledge and agree that any Quarterly Vault APR associated with a TS Vault represents the maximum yield rate applicable to such TS Vault, and the maximum yield rate that may be earned by you in respect of your Digital Assets held in the corresponding Custodial Vault Account. No minimum amount of yield is guaranteed or promised to you, and the holding your Digital Assets in a Custodial Vault Account and delegating the corresponding Synthetic Tokens may result in no yield being earned by you, or yield that is less than the Quarterly Vault APR.

Without limiting the foregoing, you further acknowledge and agree that: (i) the Quarterly Vault APR is an upper bound on yield eligibility for the applicable TS Vault for the applicable quarter, and is not a promise, prediction, or guarantee of yield; (ii) actual yield (if any) allocable to your delegated Digital Assets depends on the performance of the applicable Deployment Activities and may be less than the Quarterly Vault APR or may be zero, and your net position may be reduced due to Qualified Losses; (iii) any accrued yield displayed on the TownSquare Platform or reflected in a VRT represents an estimate and tracking of accrued yield and is not payable to you unless and until a Withdrawal is completed in accordance with this Agreement; and (iv) if you are not satisfied with the yield, strategy profile, or other characteristics of a TS Vault, you may elect to submit for a Withdrawal in accordance with this Agreement, subject to the withdrawal queue and other Withdrawal mechanics described herein.

VRTs

As described above, at the time a User elects to transfer Digital Assets to a Custodial Vault Account, (1) Synthetic Tokens are minted and delivered to the corresponding TS Vault on a 1:1 basis, and (2) a VRT representing the delegated position is delivered to the User.

A VRT held by a User is a digital representation of a “vault share” of the applicable TS Vault, and tracks the allocable portion of Synthetic Tokens in a TS Vault that were initially caused to be minted by the User’s transfer of the corresponding Digital Assets to the corresponding Custodial Vault Account. As Synthetic Tokens in a TS Vault are deployed on-chain to applicable Deployment Activities, smart contracts governing the TS Vault track and calculate the aggregate net asset value (“NAV”) of the TS Vault, equal to the aggregate market value of the Vault Assets of such TS Vault, on a periodic basis. NAV tracking and NAV calculations for a TS Vault occur on a daily basis (unless a different period is indicated in the Documentation), and VRTs are updated with the latest allocable NAV information on a periodic basis.

As Synthetic Tokens in a TS Vault are deployed on-chain to applicable Deployment Activities, any yield generated from such Deployment Activities is added programmatically to the TS Vault in the form of additional Synthetic Tokens (through automations and operations governed by applicable smart contracts, as further described in the Documentation), thereby increasing the NAV of the TS Vault by the amount of such aggregate yield. Additionally, to the extent Deployment Activities result in losses of Synthetic Tokens that constitute Qualified Losses, such Synthetic Tokens constituting Qualified Losses are calculated as being removed from the TS Vault resulting in a corresponding reduction of the NAV of the TS Vault. Any yield or losses generated from off-chain Deployment Activities in respect of Off-Chain Allocated Assets are reflected in the NAV of the applicable TS Vault through the reconciliation and reporting processes described in the Documentation.

Since a VRT represents a “vault share” of the applicable TS Vault, a User’s VRT represents, at any given time, the portion of the NAV of the TS Vault allocable to such User’s VRT.

Additionally, since the TS Vault Services programmatically maintains a 1:1 correspondence between a given TS Vault and the aggregate Digital Assets held in corresponding Custodial Vault Accounts (including Digital Assets that are then Off-Chain Allocated Assets), a User’s VRT also represents the allocable portion of Digital Assets held at a given time in such Custodial Vault Accounts (or allocated as Off-Chain Allocated Assets) that correspond on a 1:1 basis to the portion of the NAV of the TS Vault allocable to such User’s VRT. Such allocable portion of Digital Assets is referred to as a User’s “Vaultshare Balance.” The VRT represents a right to redeem the User’s Vaultshare Balance from the applicable Custodial Vault Accountin accordance with the Withdrawal procedures under this Agreement. For clarity, in no event can a VRT be redeemed for Synthetic Tokens.

Withdrawal

A User with Digital Assets held in a Custodial Vault Account and delegating the corresponding Synthetic Tokens to Deployment Activities may redeem its net position in Digital Assets (net of any allocable losses and including any allocable accrued yield) (a “Withdrawal”) in accordance with the following procedures.

On the TownSquare Platform at the user interface associated with the applicable TS Vault, the User can view the current withdrawal queue (measured in days) associated with the TS Vault. In no event will the applicable withdrawal queue be less than seven days.

Through the TownSquare Platform, the User can elect to redeem its full position relating to the delegated Digital Assets. As of the current time, the User can only redeem by electing to redeem its entire position.

To redeem, the User is required to make a redemption election through functionality on the TownSquare Platform, which calls a function to transfer and deliver the User’s VRT to the applicable TS Vault at the time specified in the withdrawal queue.

After the User makes a redemption election, the User’s VRT is delivered to the applicable TS Vault as of the time specified in the withdrawal queue, which triggers a series of automations and operations on the TownSquare Platform to effect a Withdrawal of the User’s position, further details of which are provided in the Documentation. Upon delivery of the VRT to the TS Vault, the VRT is “burned” (expunged), and an instruction is automatically delivered to the corresponding Custodial Vault Account for the User’s Vaultshare Balance to be unlocked. To the extent any portion of a User’s Vaultshare Balance consists of Off-Chain Allocated Assets, such portion will first be returned from the applicable off-chain Third Party Deployment Venue to the Custodial Vault Account, and the withdrawal queue for a TS Vault with off-chain Deployment Activities may reflect, and may be extended by, the time required for such return.

Loss of Collateral

As a User or potential User of TS Vault Services, you acknowledge and agree that Digital Assets held by you in a Custodial Vault Account serve as collateral for the corresponding Synthetic Tokens minted and delivered to the corresponding TS Vault, and that TownSquare will have access to and control of such collateral during the time that you hold a VRT, in accordance with this Agreement. Furthermore, TownSquare will have an absolute right to take possession of and retain such collateral to the extent that any losses resulting from the deployment of corresponding Synthetic Tokens in Deployment Activities constitute Qualified Losses.

Any loss of Synthetic Tokens or Off-Chain Allocated Assets (or of the value of any assets or positions corresponding thereto) arising from or in connection with Deployment Activities, whether on-chain or off-chain, is a “Qualified Loss” except to the extent such loss directly results from the Excluded Conduct (i.e., fraud, gross negligence, willful misconduct, or material breach, as further described in the definition thereof) of a Strategy Party. Without limiting the generality of the foregoing, Qualified Losses include any Strategy Losses and any losses resulting from one or more of the following events:

• A Strategy Loss, including any loss resulting from trading, hedging, allocation, or rebalancing decisions made by the Vault Curator or TownSquare in connection with Deployment Activities;
• A loss of Synthetic Tokens resulting from any security incident, hacking, theft of assets, fraud, misconduct, security breach, data breach, exploit, manipulation, bug, or similar incident or occurrence affecting a Third Party Deployment Venue;
• A loss of Synthetic Tokens resulting from a Third Party Deployment Venue becoming insolvent, filing for or becoming subject to any voluntary or involuntary bankruptcy, reorganization, receivership, conservatorship, liquidation, dissolution, assignment for the benefit of creditors, or any similar proceeding under applicable law, or otherwise ceasing, suspending, or materially curtailing its operations;
• A loss of Synthetic Tokens resulting from a Depeg Event;
• A loss of Synthetic Tokens resulting from a significant market disruption or dislocation, including extreme volatility, rapid or severe declines in market value or liquidity, widening spreads, liquidation cascades, trading halts, token delisting, or other market conditions that materially impair the ability to enter into, maintain, hedge, unwind, or settle positions in Deployment Activities;
• A loss of Synthetic Tokens resulting from the breach of any agreement with TownSquare by any Third Party Deployment Venue;
• A loss of Synthetic Tokens resulting from the breach of any agreement with TownSquare by you (including this Agreement and the Terms);
• A permanent loss of Synthetic Tokens resulting from a Major Event affecting any Third Party Deployment Venue or any third party responsible for minting any corresponding Digital Assets;
• A loss of Synthetic Tokens resulting from the breach of any agreement with TownSquare by any third party responsible for minting any corresponding Digital Assets;
• A loss of Synthetic Tokens resulting from the failure, manipulation, delayed updating, or material inaccuracy of any oracle, price feed, or data source relied upon by a Third Party Deployment Venue in connection with Deployment Activities;
• A loss of Synthetic Tokens resulting from any regulatory action, governmental order, sanction, seizure, or legal proceeding directed at or materially affecting a Third Party Deployment Venue, any Digital Asset corresponding to Synthetic Tokens, or any third party responsible for minting any such corresponding Digital Assets, in each case to the extent such action impairs or restricts the use, transfer, accessibility, or value of Synthetic Tokens held in a TS Vault; and
• A loss of Off-Chain Allocated Assets resulting from the default, insolvency, or failure to perform of any off-chain counterparty, or from the freezing, suspension, seizure, or restriction of any account, assets, or withdrawals at, or any custody, settlement, transfer, or reconciliation failure or delay involving, any off-chain Third Party Deployment Venue.

You acknowledge and agree that, other than losses that directly result from the fraud, gross negligence, willful misconduct, or material breach of a Strategy Party (in each case as further described in the definition of Excluded Conduct), all losses arising from or in connection with Deployment Activities, including all Qualified Losses and Strategy Losses, are borne solely by Users, ratably in proportion to their respective interests in the applicable TS Vault as reflected in their VRTs, and that TownSquare or its affiliate has a right to claim, take possession of, and retain any portion of your Digital Assets corresponding to your allocable portion of Synthetic Tokens in a TS Vault that are subject to Qualified Losses.

Without limiting the foregoing, you acknowledge and agree that none of TownSquare, the Vault Curator, any Liquidity Distribution Platform, or any other Strategy Party (i) guarantees the performance of any TS Vault, any Deployment Activities, or any trading or investment strategy, or guarantees against loss, or (ii) shall have any liability or obligation to you to reimburse, compensate, indemnify, or otherwise make you whole for any Qualified Loss (including any Strategy Loss), in each case except to the extent such loss directly results from the Excluded Conduct of such Strategy Party. Any liability arising from Excluded Conduct shall be borne solely by the Strategy Party whose Excluded Conduct directly caused the applicable loss, and not by any other Strategy Party, and shall be limited to the portion of such loss directly attributable to such Excluded Conduct. The distribution of liquidity to, or the making available of access to, a TS Vault through a Liquidity Distribution Platform shall not, by itself, render such Liquidity Distribution Platform responsible for the management, performance, or Deployment Activities of such TS Vault.

In the event of any loss and removal of Synthetic Tokens from a TS Vault constituting a Qualified Loss (which may include Synthetic Tokens representing accrued yield), TownSquare will, pursuant to the Account Control Agreement, cause the smart contract architecture to call a function to, and will instruct Custodian to, transfer a corresponding portion of Digital Assets from the corresponding Custodial Vault Account to a TownSquare account, and the NAV of such TS Vault and each outstanding VRT relating to such TS Vault will be updated accordingly. In the case of a Qualified Loss of Off-Chain Allocated Assets, such loss will be reflected directly as a reduction of the NAV of the applicable TS Vault and of each outstanding VRT relating to such TS Vault, without any further transfer from a Custodial Vault Account in respect of such loss.

You acknowledge and agree that TownSquare’s security interest referenced in this Agreement is evidenced, granted, and perfected through the contractual control arrangements set forth in the Account Control Agreement and your applicable agreements with Custodian. You consent to and authorize TownSquare to file one or more financing statements (and any amendments, continuations, or similar instruments) under the Uniform Commercial Code or other applicable law describing the Digital Assets held in your Custodial Vault Account and/or delegated to a Custodial Vault Account in connection with this Agreement. You further consent to and authorize the exercise by Custodian and TownSquare of the control rights, compliance with instructions, and other actions contemplated by the Account Control Agreement and this Agreement, including any instruction or transfer effected pursuant to this Agreement in connection with Qualified Losses.

NAV Calculation

As further described in the Documentation, the NAV of a TS Vault is calculated and updated on a daily (24-hour) basis (unless a different period is indicated in the Documentation) as follows. At the same specified time each day (or other applicable period) (the “Measurement Time”), smart contracts deployed on the TownSquare Platform (using, in the case of off-chain Deployment Activities, position and valuation data reported in accordance with the Documentation) calculate the Net Asset Appreciation and Net Asset Depreciation of the Vault Assets of such TS Vault for the period beginning at the Measurement Time on the prior day (or other period) and ending at the Measurement Time on the then-current day (or other period) (“NAV Period”). The NAV of such TS Vault as of the Measurement Time is calculated by (1) increasing the prior NAV of such TS Vault calculated as of the Measurement Time on the prior day (or other period) by any Net Asset Appreciation, and (2) decreasing the prior NAV of such TS Vault calculated as of the Measurement Time on the prior day (or other period) by any Net Asset Depreciation, as adjusted for (x) newly minted Synthetic Tokens delivered to the TS Vault during such NAV Period related to delegations of Digital Assets, (y) the removal of any Synthetic Tokens corresponding to a Withdrawal during such NAV Period, and (z) the removal of any Synthetic Tokens representing the Platform Fee for such TS Vault calculated for such NAV Period. Newly minted Synthetic Tokens delivered to a TS Vault in respect of delegations during any NAV Period are calculated as having been delivered at the commencement of such Measuring Period, and any Synthetic Tokens removed from a TS Vault in respect of Withdrawals during any NAV Period are calculated as having been removed at the commencement of such Measuring Period. Synthetic Tokens removed from a TS Vault representing the Platform Fee for such NAV Period are calculated as being removed at the end of such NAV Period.

Any Net Asset Appreciation occurring in any NAV Period for a TS Vault will result from yield accruing to such TS Vault from Deployment Activities (after adjustment for delivery of newly minted Synthetic Tokens relating to delegations). Any Net Asset Depreciation occurring in any NAV Period for a TS Vault will result from the removal of Synthetic Tokens in respect of Qualified Losses (including Strategy Losses) (after adjustment for the removal of any Synthetic Tokens corresponding to Withdrawals).

Fees

While TownSquare does not charge usage fees directly to Users, TownSquare collects and retains, as a platform fee (“Platform Fee”), any yield accruing to a TS Vault that is in excess of the Quarterly Vault APR accrued to such TS Vault, on a daily basis, which is measured ratably for each NAV Period and deemed to be swept as of each Measurement Time.

If a given NAV Period for a TS Vault results in a decrease in NAV from Net Asset Depreciation for such NAV Period (as adjusted for new delegations and Withdrawals), no Platform Fee is payable or retained by TownSquare in respect of such NAV Period.

If a given NAV Period for a TS Vault results in an increase in NAV from Net Asset Appreciation for such NAV Period (as adjusted for new delegations and Withdrawals), then a Platform Fee is payable and retained by TownSquare only to the extent that such Net Asset Appreciation for such NAV Period (as adjusted for new delegations and Withdrawals) exceeds the then-current maximum Quarterly Vault APR for such TS Vault, measured for such period (on the basis of a 365-day year).

You acknowledge and agree that the NAV of a TS Vault is calculated by the TownSquare Platform through automated smart contract-based processes based on the aggregate market value of Vault Assets as determined at each applicable Measurement Time. Market values of Synthetic Tokens are derived from on-chain data sources, which may include decentralized exchange pricing, oracle feeds, and other automated valuation mechanisms, and, in the case of assets or positions held through off-chain Deployment Activities, from off-chain data sources, which may include centralized exchange pricing, account statements or position reports from off-chain Third Party Deployment Venues, and valuations or reports provided by the Vault Curator, and such values may be subject to volatility, temporary dislocations, or inaccuracies. NAV calculations are not independently audited or verified by any third party and are provided for informational and operational purposes only. You further acknowledge that (i) timing differences between Measurement Times may result in the NAV of a TS Vault not reflecting real-time changes in the market value of Synthetic Tokens or the results of Deployment Activities occurring between Measurement Times; (ii) NAV calculations may be affected by latency in on-chain data, delays or errors in off-chain reporting or reconciliation, oracle update frequency, network congestion, and the sequencing of transactions on applicable blockchain networks; and (iii) in periods of extreme market volatility, protocol disruption, or network congestion, NAV calculations may not accurately reflect the realizable value of the Synthetic Tokens held in a TS Vault at any given time. None of TownSquare, the Vault Curator, or any other Strategy Party represents or warrants the accuracy, completeness, or timeliness of any NAV calculation, and no Strategy Party shall be liable for any losses arising from errors, delays, or inaccuracies in NAV calculations except to the extent directly resulting from such Strategy Party's Excluded Conduct. The methodology used for NAV calculations is further described in the Documentation and may be updated or modified by TownSquare from time to time in its sole discretion.

Eligibility

You acknowledge and agree that you may not use the TS Vault Services if you:

1. are below the legal age in your jurisdiction, or if it is otherwise illegal in your jurisdiction for you to access, view and/or use the TS Vault Services;
2. do not have the technical knowledge necessary or advisable to understand and evaluate the risks of using TS Vault Services;
3. are currently located in or, a resident, citizen, national or agent of, or an entity organized, incorporated or doing business in, Belarus, Burundi, Crimea and Sevastopol, Cuba, Democratic Republic of Congo, Iran, Iraq, Libya, North Korea, Russia, Somalia, Sudan, Syria, the United States of America, Venezuela, or Zimbabwe; or
4. are a person or entity that is (i) on any list of prohibited or restricted parties maintained by the government of the United Kingdom, the European Union, or the United States, including without limitation the U.S. Treasury Department’s list of Specially Designated Nationals or the U.S. Department of Commerce Denied Person’s List or Entity List, (ii) located or organized in any country or region any country or region that has been designated by the government of the United Kingdom, the European Union, or the United States, as “terrorist supporting” or is otherwise subject to embargo by any of the foregoing, or (iii) owned or controlled by, or intend to transact with, such persons or entities listed in (i)-(ii).

TownSquare Access Rights

At any time during the term of this Agreement, TownSquare shall have all necessary rights and permissions, as set forth in the Account Control Agreement, to give instructions with respect to any Custodial Vault Account and all Digital Assets recorded and stored therein, including instructions to transfer Digital Assets to and from off-chain Third Party Deployment Venues.

No Fiduciary Relationship

To the fullest extent permitted by applicable law, you acknowledge that none of TownSquare, the Vault Curator, or any Liquidity Distribution Platform owes you any fiduciary duties. All decisions relating to the configuration, allocation, operation, and management of any TS Vault are made by TownSquare and/or the Vault Curator in its or their sole discretion.

Important Disclaimers

Warranty Disclaimer. TownSquare and its licensors, suppliers, partners, parent, subsidiaries or affiliated entities, the Vault Curator, each Liquidity Distribution Platform, and each of their respective officers, directors, members, employees, consultants, contract employees, representatives and agents, and each of their respective successors and assigns (TownSquare and all such parties together, the “TownSquare Parties”) make no representations or warranties concerning the Services, including without limitation regarding any Content contained in or accessed through the Services, and the TownSquare Parties will not be responsible or liable for the accuracy, copyright compliance, legality, or decency of material contained in or accessed through the Services or any claims, actions, suits procedures, costs, expenses, damages or liabilities arising out of use of, or in any way related to your participation in, the Services. The TownSquare Parties make no representations or warranties regarding suggestions or recommendations of services or products offered or purchased through or in connection with the Services. THE SERVICES AND CONTENT ARE PROVIDED BY TOWNSQUARE (AND ITS LICENSORS AND SUPPLIERS) ON AN “AS-IS” BASIS, WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, THAT USE OF THE SERVICES IS LAWFUL IN ANY PARTICULAR JURISDICTION OR THAT USE OF OR THE ABILITY TO MAKE WITHDRAWALS THROUGH THE SERVICES OR ANY LIQUIDATION OR FORECLOSURE FEATURES WILL BE UNINTERRUPTED, UNRESTRICTED OR ERROR-FREE. SOME STATES DO NOT ALLOW LIMITATIONS ON HOW LONG AN IMPLIED WARRANTY LASTS, SO THE ABOVE LIMITATIONS MAY NOT APPLY TO YOU. YOU ACKNOWLEDGE AND AGREE THAT CERTAIN CONTENT MADE AVAILABLE THROUGH THE SERVICES IS GENERATED THROUGH THE USE OF NON-HUMAN TOOLS, PLATFORMS AND/OR OTHER TECHNOLOGIES POWERED BY AI. TOWNSQUARE IS UNABLE TO GUARANTEE THE SUITABILITY, ACCURACY, QUALITY, SECURITY, LEGALITY AND RELIABILITY OF AI SERVICES, INCLUDING ANY CONTENT PRODUCED THROUGH THE USE OF AI SERVICES. ANY SUCH CONTENT MAY NOT BE USED AS A SUBSTITUTE FOR PROFESSIONAL ADVICE OR INFORMATION AND TOWNSQUARE MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER REGARDING SUCH CONTENT, WHICH IS PROVIDED “AS IS” AND SHOULD BE USED AT YOUR OWN RISK. GIVEN THE PROBABILISTIC NATURE OF MACHINE LEARNING, USE OF AI SERVICES MAY IN SOME SITUATIONS RESULT IN INCORRECT OR INACCURATE INFORMATION.

WITHOUT LIMITING THE FOREGOING, YOU ACKNOWLEDGE AND AGREE THAT TOWNSQUARE DOES NOT OWN OR CONTROL, AND ASSUMES NO RESPONSIBILITY FOR, THE UNDERLYING SOFTWARE PROTOCOLS WHICH GOVERN THE OPERATION OF CERTAIN DIGITAL ASSETS ON BLOCKCHAIN NETWORKS. GENERALLY, THE UNDERLYING PROTOCOLS ARE OPEN SOURCE, AND ANYONE CAN USE, COPY, MODIFY, AND DISTRIBUTE THEM. WE ASSUME NO RESPONSIBILITY FOR THE OPERATION OF THE BLOCKCHAIN NETWORKS OR UNDERLYING PROTOCOLS, AND DO NOT GUARANTEE THE FUNCTIONALITY OR SECURITY THEREOF. THROUGH USE OF THE SERVICES, YOU MAY BE ABLE TO EMPLOY DEPLOYMENT STRATEGIES AND USE DIGITAL ASSETS THAT ARE LEVERAGED VIA SMART CONTRACT TECHNOLOGY TO LENDING PROTOCOLS AND VAULTS THAT AUTOMATE HOW THESE DIGITAL ASSETS ARE HANDLED AND INVESTED. YOU ACKNOWLEDGE AND ACCEPT THE RISKS OF LEVERAGING BLOCKCHAIN NETWORKS AND DIGITAL ASSET PROTOCOLS AND AGREE THAT TOWNSQUARE IS NOT RESPONSIBLE OR LIABLE FOR ANY LOSS OF VALUE, ESTIMATED YIELD VALUE, VAULT HOLDINGS OR DIGITAL ASSETS (AS MAY BE APPLICABLE) YOU MAY EXPERIENCE AS A RESULT OF LEVERAGING THESE TECHNOLOGIES OR AS A RESULT OF TOWNSQUARE’S IMPLEMENTATION OF A LOAN FORECLOSURE OR DEPRECATION PRIOR TO AN ANTICIPATED LIQUIDATION OR A LIQUIDATION OR DEPRECATION OF YOUR ACCOUNT OR VAULT WHEN COLLATERAL VALUE OR THE AMOUNT OF VAULT HOLDINGS DROPS BELOW THE THRESHOLD REQUIRED TO KEEP A PARTICULAR BORROW POSITION OPEN. YOU ACKNOWLEDGE AND ACCEPT THAT TOWNSQUARE HAS NO RESPONSIBILITY TO ASSIST YOU WITH UNSUPPORTED DIGITAL ASSETS, THIRD PARTY APPLICATIONS, THIRD PARTY ACCOUNTS, THIRD PARTY INTEGRATIONS OR ANY UNDERLYING SOFTWARE PROTOCOLS. YOU FURTHER ACKNOWLEDGE AND ACCEPT THAT TOWNSQUARE HAS NO RESPONSIBILITY TO SUPPORT ANY PARTICULAR VAULT, THIRD-PARTY WALLET PROVIDER, CUSTODIAN, PROTOCOL COUNTERPARTIES, THIRD PARTY ACCOUNT, THIRD PARTY INTEGRATION OR THIRD PARTY APPLICATIONS YOU MAY WISH TO LEVERAGE TO BORROW, TRANSFER, OR EXCHANGE DIGITAL ASSETS.

YOU ACKNOWLEDGE AND ACCEPT THAT VAULTS AND DEPLOYMENT STRATEGIES MAY INVOLVE EXPOSURE TO THIRD-PARTY PROTOCOLS, MONEY MARKETS, LENDING PLATFORMS, CENTRALIZED EXCHANGES, OTC TRADING DESKS, BROKERS, CUSTODIANS, AND OTHER ON-CHAIN AND OFF-CHAIN COUNTERPARTIES (“PROTOCOL COUNTERPARTIES”). TOWNSQUARE DOES NOT CONTROL AND IS NOT RESPONSIBLE FOR THE SOLVENCY, PERFORMANCE, SECURITY, OR AVAILABILITY OF ANY PROTOCOL COUNTERPARTIES. YOU FURTHER ACKNOWLEDGE THAT LIQUIDITY CONDITIONS MAY AFFECT YOUR ABILITY TO WITHDRAW VAULT HOLDINGS OR REALIZE EXPECTED YIELDS, AND THAT DURING PERIODS OF MARKET STRESS OR PROTOCOL CONGESTION, WITHDRAWALS MAY BE DELAYED, GATED, OR SUBJECT TO SLIPPAGE OR OTHER ADVERSE CONDITIONS.

DEALING OR TRADING IN DIGITAL ASSETS IS INHERENTLY RISKY, AS THE PRICES OF OR VALUE OF DIGITAL ASSETS AND YOUR ACCOUNT CAN FLUCTUATE AND CHANGE RAPIDLY. TOWNSQUARE CANNOT, AND DOES NOT, REPRESENT OR GUARANTEE THAT THE VALUE OF ANY DIGITAL ASSETS THAT YOU BORROW, PROVIDE, OR EXCHANGE VIA THE SERVICES OR OF ANY TOWNSQUARE ASSETS WILL NOT CHANGE, DIMINISH, OR FALL. YOU THEREFORE BUY, BORROW, SELL, AND REDEEM ANY DIGITAL ASSETS, VAULT HOLDINGS, TOWNSQUARE ASSETS AND REWARDS THROUGH THE SERVICES AT YOUR OWN RISK.

No Financial Advice. WHILE THE SERVICES MAY ALLOW YOU TO EXPLORE AND COMPARE RATES BETWEEN MONEY MARKETS, TRACK AND MANAGE LOAN HEALTH FROM MULTIPLE LENDERS, LEVERAGE VAULTS MADE AVAILABLE THROUGH THE SERVICES AND ACCESS LOAN PROTECTION FEATURES, YOU ACKNOWLEDGE AND AGREE THAT TOWNSQUARE IS NOT A FINANCIAL INSTITUTION OR INVESTMENT ADVISOR AND THAT YOUR RELIANCE ON ANY OF THE ABOVE IS AT YOUR OWN RISK. ANY INFORMATION AND CONTENT PROVIDED THROUGH THE SERVICES IS FOR INFORMATIONAL PURPOSES AND IS NOT INTENDED TO PROVIDE LEGAL, FINANCIAL, INVESTMENT, EARNING OR TAX ADVICE. WE CANNOT GUARANTEE THE ACCURACY, COMPLETENESS, OR TIMELINESS OF INFORMATION OR CONTENT PROVIDED, INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH PROTOCOLS ACCESSIBLE THROUGH THE SERVICES. YOU SHOULD NOT TAKE, OR REFRAIN FROM TAKING, ANY ACTION BASED ON ANY INFORMATION OR CONTENT CONTAINED IN OR MADE AVAILABLE THROUGH THE SERVICES. YOU ALONE ARE RESPONSIBLE FOR DETERMINING WHETHER ANY DIGITAL ASSETS TRANSACTION IS APPROPRIATE FOR YOU BASED ON YOUR PERSONAL OBJECTIVES, FINANCIAL CIRCUMSTANCES AND RISK TOLERANCE.

Other Covenants and Agreements

Limitation of Liability. TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY (INCLUDING, WITHOUT LIMITATION, TORT, CONTRACT, STRICT LIABILITY, OR OTHERWISE) SHALL ANY OF THE TOWNSQUARE PARTIES BE LIABLE TO YOU FOR (A) ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF DATA, LOSS OF GOODWILL, WORK STOPPAGE, ACCURACY OF RESULTS, OR COMPUTER FAILURE OR MALFUNCTION, (B) ANY SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY, (C) ANY CHANGE IN VALUE OF ANY DIGITAL ASSETS, (D) ANY CHANGE IN APPLICABLE LAWS, REGULATIONS, RULES OR POLICIES, (E) THE MALFUNCTION OR UNEXPECTED OR UNINTENDED FUNCTION OF ANY BLOCKCHAIN TECHNOLOGY (INCLUDING ANY FEATURES OF THE SERVICES THAT MAY INTEGRATE, EMBED OR RELY ON BLOCKCHAIN TECHNOLOGY) OR OTHER THIRD PARTY INTEGRATION OR THIRD PARTY NETWORKS FOR THE BORROWING, SALE OR EXCHANGE OF DIGITAL ASSETS OR THE MANAGEMENT OF VAULTS, YIELD ACCOUNTS, AND REWARD-BEARING AND LENDING PROTECTION FEATURES, (F) ANY ACTION TAKEN IN RELIANCE ON DEPLOYMENT STRATEGIES OR OTHER INFORMATION OR CONTENT MADE AVAILABLE THROUGH THE SERVICES, (G) ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (I) ONE-HUNDRED ($100) DOLLARS OR (II) THE AMOUNTS PAID AND/OR PAYABLE BY YOU TO TOWNSQUARE IN FEES IN CONNECTION WITH THE SERVICES IN THE TWELVE (12) MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM OR (H) ANY MATTER BEYOND OUR REASONABLE CONTROL. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL, OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.

Indemnity. To the fullest extent allowed by applicable law, you agree to indemnify and hold the TownSquare Parties harmless from and against any and all claims, liabilities, damages (actual and consequential), losses, and expenses (including attorneys’ fees) arising from or in any way related to any claims relating to (a) your use of the Services (including any actions taken by a third party using your account), and (b) your violation of this Agreement. In the event of such a claim, suit, or action (“Claim”), we will attempt to provide notice of the Claim to the contact information we have for your account (provided that failure to deliver such notice shall not eliminate or reduce your indemnification obligations hereunder).

Assignment.You may not assign, delegate or transfer this Agreement or your rights or obligations hereunder in any way (by operation of law or otherwise) without TownSquare's prior written consent. We may transfer, assign, or delegate this Agreement and our rights and obligations without consent.

Choice of Law. This Agreement are governed by and will be construed under the laws of the British Virgin Islands, without regard to the conflicts of laws provisions thereof.

Arbitration Agreement. Please read the following ARBITRATION AGREEMENT carefully because it requires you to arbitrate certain disputes and claims with TownSquare and limits the manner in which you can seek relief from TownSquare. Both you and TownSquare acknowledge and agree that for the purposes of any dispute arising out of or relating to the subject matter of this Agreement, TownSquare's officers, directors, employees and independent contractors (“Personnel”) are third-party beneficiaries of this Agreement, and that upon your acceptance of this Agreement, Personnel will have the right (and will be deemed to have accepted the right) to enforce this Agreement against you as the third-party beneficiary hereof.

(a) Arbitration Rules; Applicability of Arbitration Agreement. The parties shall use their best efforts to settle any dispute, claim, question, or disagreement arising out of or relating to the subject matter of this Agreement directly through good-faith negotiations, which shall be a precondition to either party initiating arbitration. If such negotiations do not resolve the dispute, it shall be finally settled by binding arbitration in George Town, Grand Cayman, the Cayman Islands. The arbitration will proceed in the English language and be administered by the Cayman International Mediation & Arbitration Centre (“CI-MAC”) in accordance with the CI-MAC Arbitration Rules (the “Rules”) then in effect, which Rules are hereby deemed to be incorporated by reference to this Agreement, and governed by the Arbitration Act (as amended). Arbitration shall be conducted by one or more commercial arbitrator(s) with substantial experience in resolving intellectual property and commercial contract disputes. The arbitrator(s) shall be selected from the appropriate list of CI-MAC arbitrators in accordance with such Rules. Judgment upon the award rendered by such arbitrator may be entered in any court of competent jurisdiction.

(b) Costs of Arbitration. The Rules will govern payment of all arbitration fees. TownSquare will pay all arbitration fees for claims less than seventy-five thousand ($75,000) dollars. TownSquare will not seek its attorneys’ fees and costs in arbitration unless the arbitrator determines that your claim is frivolous.

(c) Infringement.Notwithstanding the foregoing obligation to arbitrate disputes, each party shall have the right to pursue injunctive or other equitable relief at any time, from any court of competent jurisdiction, to prevent the actual or threatened infringement, misappropriation, or violation of a party's copyrights, trademarks, trade secrets, patents or other intellectual property rights.

(d) Waiver of Jury Trial. YOU AND TOWNSQUARE WAIVE ANY CONSTITUTIONAL AND STATUTORY RIGHTS TO GO TO COURT AND HAVE A TRIAL IN FRONT OF A JUDGE OR JURY. You and TownSquare are instead choosing to have claims and disputes resolved by arbitration. Arbitration procedures are typically more limited, more efficient, and less costly than rules applicable in court and are subject to very limited review by a court. In any litigation between you and TownSquare over whether to vacate or enforce an arbitration award, YOU AND TOWNSQUARE WAIVE ALL RIGHTS TO A JURY TRIAL, and elect instead to have the dispute be resolved by a judge.

(e) Waiver of Class or Consolidated Actions. ALL CLAIMS AND DISPUTES WITHIN THE SCOPE OF THIS ARBITRATION AGREEMENT MUST BE ARBITRATED OR LITIGATED ON AN INDIVIDUAL BASIS AND NOT ON A CLASS BASIS. CLAIMS OF MORE THAN ONE CUSTOMER OR USER CANNOT BE ARBITRATED OR LITIGATED JOINTLY OR CONSOLIDATED WITH THOSE OF ANY OTHER CUSTOMER OR USER. If however, this waiver of class or consolidated actions is deemed invalid or unenforceable, neither you nor TownSquare is entitled to arbitration; instead all claims and disputes will be resolved in a court as set forth in (f) below.

(f) Exclusive Venue. In any circumstances where the foregoing arbitration agreement permits either you or TownSquare to litigate any dispute arising out of or relating to the subject matter of this Agreement in court, then the foregoing arbitration agreement will not apply to either party, and both you and TownSquare agree that any judicial proceeding (other than small claims actions) will be brought in the courts located in Road Town, British Virgin Islands.

(g) Severability. If the prohibition against class actions and other claims brought on behalf of third parties contained above is found to be unenforceable, then all of the preceding language in this Arbitration Agreement section will be null and void. This arbitration agreement will survive the termination of your relationship with TownSquare.

Miscellaneous. You will be responsible for paying, withholding, filing, and reporting all taxes, duties, and other governmental assessments associated with your activity in connection with the Services, provided that the TownSquare may, in its sole discretion, do any of the foregoing on your behalf or for itself as it sees fit. The failure of either you or us to exercise, in any way, any right herein shall not be deemed a waiver of any further rights hereunder. If any provision of this Agreement are found to be unenforceable or invalid, that provision will be limited or eliminated, to the minimum extent necessary, so that this Agreement shall otherwise remain in full force and effect and enforceable. You and TownSquare agree that this Agreement are the complete and exclusive statement of the mutual understanding between you and TownSquare, and that this Agreement supersede and cancel all previous written and oral agreements, communications and other understandings relating to the subject matter of this Agreement. You hereby acknowledge and agree that you are not an employee, agent, partner, or joint venture of TownSquare, and you do not have any authority of any kind to bind TownSquare in any respect whatsoever.

Except as expressly set forth in the section above regarding the arbitration agreement, and except that the Vault Curator, each Liquidity Distribution Platform, and the other Strategy Parties are intended third-party beneficiaries of, and may enforce, the provisions of this Agreement that allocate Qualified Losses to Users or that disclaim, exclude, or limit their liability, you and TownSquare agree there are no third-party beneficiaries intended under this Agreement .