25% of every block reward flows to the Metals Funding Vault by consensus. Accumulated SOST is converted to tokenized precious-metal exposure (XAUT/PAXG) through an auditable TWAP execution pipeline. Purchased reserves are deposited into a Heritage Vault on Ethereum mainnet — sealed by default, perpetual by design.
Operational liquidity is separated from permanent reserve storage. The Funding Vault needs flexibility to sell SOST and buy precious-metal tokens. The Reserve Vault needs maximum immutability. Splitting them achieves both without mixing hot and cold functions.
Block reward mined
→25% accumulates (SOST chain)
→Sell SOST, buy XAUT/PAXG
→Heritage sealed (Ethereum)
Hardcoded coinbase destination. Receives exactly 25% of each block subsidy by consensus (q = reward // 4). Any block without the correct vault output is invalid. Accumulates SOST for periodic conversion to tokenized precious metals.
Holds allowlisted precious-metal tokens (XAUt and PAXG). Sealed by default — no outbound transfers in normal operation. Reserve assets are intended to remain perpetual and untouched while SOST exists, except under Emergency Catastrophe authorization.
Project-level commitments enforced either by SOST consensus (Funding Vault inflow) or by immutable smart contracts and public auditability (Reserve Vault behavior and reporting). Immutable at genesis.
| Rule | Provision |
|---|---|
| G1 | Consensus Allocation — Every valid block MUST pay the Funding Vault exactly q = reward // 4. Any block that fails to do so is invalid. |
| G2 | Two-Vault Separation — Funding Vault is operational; Reserve Vault is cold storage. All purchased XAUT/PAXG MUST be deposited into the Reserve Vault. |
| G3 | Heritage Reserve — Reserve Vault deployed on Ethereum mainnet, sealed by default. No outbound transfers in normal operation. Perpetual while SOST exists. |
| G4 | Purchase Start Delay — Purchases begin no earlier than 6 months after genesis (2026-03-13) and only once market readiness is met with verifiable execution venue. |
| G5 | Batching / Anti-Momentum — Purchases executed in batches following rule-based TWAP policy, not discretionary market-timing. |
| G6 | Allowlist v2 — Reserve limited to allowlisted precious-metal tokens: PAXG and XAUt only. USDC/USDT permitted only as temporary staging (≤72 hours). |
| G7 | Default 50/50 — Default acquisition targets 50/50 XAUt/PAXG. Adjustable for future purchases only; must be disclosed in batch reports. No rebalancing of existing reserves. |
| G8 | Issuer Risk — Foundation may redirect future purchases from a threatened issuer without consensus. Previously purchased reserves remain sealed. |
| G9 | Emergency Catastrophe — Dual gate required: ≥75% miner signaling (108/144 blocks in 24h window) + Foundation Execution Order. Actions limited to E1 ROTATE and E2 LIQUIDATE. |
| G10 | Transparency — Both vault addresses, all batch reports, and all relevant transaction proofs MUST be publicly published in a reproducible format. |
Convert Funding Vault SOST into XAUT/PAXG with minimal market impact, maximum traceability, and rule-based execution. First purchases begin no earlier than September 2026 (≥6 months after genesis 2026-03-13).
| Stage | Role | Detail |
|---|---|---|
| Watcher | Monitor | Monitors Funding Vault balance on SOST chain, detects batch threshold |
| Batcher | Order | Creates signed execution order when threshold is met |
| Executor | Trade | Sells SOST in TWAP clips via CEX/OTC/DEX, purchases XAUT/PAXG, deposits to Reserve Vault |
| Attestor | Audit | Publishes public batch record with full transaction proofs |
| Parameter | Value |
|---|---|
| Max daily volume | 2% of exchange daily volume |
| Clips per day | 48–96 micro-orders |
| Max slippage per clip | 0.5%–1.0% |
| Crash throttle | Reduce or pause on >8% drawdown |
| Order type | Limit orders (no blind market selling) |
| Field | Description |
|---|---|
| Execution window | Day/time range of batch |
| SOST sold | Total amount and number of clips |
| Venue(s) | Exchange or OTC counterparties used |
| Realized TWAP/VWAP | Average execution price and total slippage |
| Purchase proof | XAUT/PAXG acquisition records |
| Deposit hash | Transaction hash proving deposit into Reserve Vault |
| Token | Issuer | Backing | Chain |
|---|---|---|---|
| PAXG | Paxos Gold | Physical gold, London Good Delivery bars | Ethereum |
| XAUt | Tether Gold | Physical gold, London Good Delivery bars | Ethereum |
Staging assets: USDC and USDT may be used strictly as temporary staging during execution (≤72 hours). They are not reserve assets. Future expansion to other metals (silver, platinum, palladium, rhodium) is a roadmap vision, not a commitment.
| Period | SOST Accumulated | Note |
|---|---|---|
| Year 1 | ~103,160 SOST | Annual intake from coinbase |
| Epoch 0 (years 0–2.5) | ~258,210 SOST | First epoch total |
| 30 years (~12 epochs) | ~1,167,300 SOST | ~95% of lifetime allocation |
| Lifetime total | ~1,167,300 SOST | 25% of max supply (4,669,201 SOST) |
Reserve movements are permitted only under a narrowly defined catastrophe procedure intended for issuer failure/migration events or existential reserve-safety events. Heritage is the default — the absence of consensus activity cannot authorize reserve movements.
| Action | Code | Description |
|---|---|---|
| ROTATE | E1 | Rotate reserve holdings to other allowlisted precious-metal tokens (e.g. XAUt ↔ PAXG) |
| LIQUIDATE→BUY→REDISTRIBUTE | E2 | Liquidate precious-metal tokens to acquire SOST and redistribute to PoPC Pool (50%) and Gold Vault (50%), with a fully auditable trail. No supply is destroyed. |
No other action types are permitted. The Foundation may pause purchases or adjust future purchase policy operationally without consensus, disclosed via batch reports.
The Reserve Vault remains sealed by default. No outbound transfers occur in normal operation. The precious-metal tokens remain a permanent, publicly verifiable reserve record. Decades of collective work — converted to metals exposure — preserved.
Triggered after 90 consecutive days with zero blocks (dead-man switch). A 60-day public notice window follows. If no Emergency Catastrophe was authorized before blocks stopped, the reserve remains in Heritage state. This is by design.
Reserve Vault holds XAUT/PAXG tokens on Ethereum mainnet. No infrastructure needed. Liquid, auditable, immediate. Risks: issuer dependency (Tether, Paxos), counterparty risk.
When reserve exceeds 500 oz equivalent: establish legal entity (Swiss/Liechtenstein), contract with LBMA-approved vault, redeem tokens for physical delivery. Independent quarterly audits.
Physical gold, platinum, palladium, rhodium, iridium, ruthenium, osmium, rhenium, silver. Zero intermediaries. Foundation-controlled vault. Public serial numbers. Heritage rules apply equally to physical metals.
| Parameter | Detail |
|---|---|
| Custody model | Foundation Custody Commitment (Model A) |
| Held on | Publicly disclosed, verifiable Ethereum addresses |
| Control | Fully under Foundation control; constitutional constraints apply |
| Redeemability | None. No redemption rights implied |
| Backing guarantee | None. No price guarantee implied |
| Transparency | Reserve status and commitment periods published on SOST explorer |
| Long-term objective | Full protocol backing via tokenized reserves contributed to protocol virtual balances through PoPC smart contract |
| Verification | Subject to verifiable proof mechanisms as determined by the Foundation |
| Layer | Trust Level | Mechanism |
|---|---|---|
| Coinbase allocation | Trustless | Consensus-enforced (hardcoded validation rules) |
| SOST → metals conversion | Auditable | Foundation-executed, public batch records, TWAP policy |
| Reserve Vault custody | Verifiable | Ethereum mainnet, public addresses, on-chain proof |
| Reserve movement | Dual gate only | ≥75% miner signal + Foundation Execution Order |
| Cross-chain bridge | None required | No bridge, no wSOST, no smart contract dependency |