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Compliance Declaration

Regulatory Disclosure

Project Classification

Tranche Protocol is a decentralized finance (DeFi) protocol that provides infrastructure for structured credit products on tokenized real-world assets (RWAs).

Does This Project Involve Regulated Assets?

Yes - Partial Involvement

This project interfaces with tokenized Real World Assets (RWAs), which may be subject to securities regulations in various jurisdictions.

Nature of Regulated Asset Involvement

1. Real World Asset Tokenization

What we do:

  • Provide smart contract infrastructure for tranching existing RWA tokens
  • Enable risk segmentation (senior/junior tranches) on RWA-backed positions
  • Facilitate yield distribution based on tranche seniority

What we do NOT do:

  • Issue or create the underlying RWA tokens
  • Custody real-world assets
  • Make investment recommendations
  • Provide financial advice

2. Token Classification

Token Classification Regulatory Notes
msUSD (Settlement) Utility Token Test token for hackathon demo
msUSD-S (Senior) Derivative/Structured Product Represents senior tranche position
msUSD-J (Junior) Derivative/Structured Product Represents junior tranche position

3. KYC/AML Framework

The protocol includes:

  • On-chain KYC Registry: Whitelist-based access control
  • Permissioned Interactions: Only verified addresses can deposit/mint
  • Curator Oversight: Admin controls for compliance enforcement

Jurisdictional Considerations

Current Status: Testnet Only

This deployment is on Mantle Sepolia Testnet for demonstration purposes only. No real assets or value are involved.

Future Mainnet Deployment

Before mainnet deployment, the following will be addressed:

  1. Legal Opinion: Obtain legal counsel on token classification
  2. Jurisdiction Selection: Deploy in crypto-friendly jurisdictions
  3. Licensing: Pursue necessary licenses if required
  4. User Restrictions: Implement geo-blocking where necessary

Risk Disclosures

Smart Contract Risk

  • Contracts are based on audited Covenant Protocol code
  • Additional audit recommended before mainnet deployment
  • Users should understand smart contract risks

Market Risk

  • Junior tranche holders bear first-loss risk
  • RWA valuations may fluctuate
  • No guarantee of returns

Regulatory Risk

  • DeFi regulations are evolving
  • Token classification may change
  • Protocol may need to restrict access in certain jurisdictions

Declaration

We, the development team of Tranche Protocol, hereby declare that:

  1. This project is submitted for the Mantle Hackathon as a demonstration of technical capabilities.

  2. The current deployment is on testnet only and involves no real assets or value.

  3. We acknowledge that tokenized RWAs and structured credit products may be subject to securities regulations in various jurisdictions.

  4. We commit to obtaining appropriate legal advice and regulatory compliance before any mainnet deployment involving real assets.

  5. This disclosure is made in good faith to provide transparency to hackathon judges and potential users.

Date: January 15, 2026

Signed: Arunabha Dhal

Project: Tranche Protocol

Hackathon: Mantle Hackathon 2026

This document is for informational purposes only and does not constitute legal advice. Consult with qualified legal counsel for regulatory matters.