Collateral Repair Auctions

When a universe forks, each Statoblast portfolio prepares branches, one per child universe (forks and migration). Each owner chooses one branch for its REP and its commitment-weighted share of the portfolio’s settlement collateral, so a child receives only the collateral of the vaults that chose it. Suppose the parent held 100 ETH of settlement collateral when it forked and a child receives only 70 ETH through migration. The child inherits the parent's full share supply, so its Collateral Repair Auction tries to raise the missing 30 ETH by selling child REP.

Full repair: bidders contribute 30 ETH, so the child reaches its 100 ETH target.
Partial repair: bidders contribute 12 ETH, so the child operates with 82 ETH and remains impaired.
No demand: no qualifying bid contributes ETH, so the child remains at 70 ETH.

The auction repairs collateral and never selects truth. It sells REP belonging to an already-defined child universe. The child resumes with only the ETH that migration and accepted bids actually provide.

Shared portfolio auctions

A portfolio shares backing across several questions. It holds one auction for the branch’s combined ETH shortfall. Only freshly unchosen provider REP can be sold; chosen providers’ backing and REP already owed to older outcome claims are excluded. A fixed one-question portfolio uses this same auction. Reporter escrow is never auction inventory.

A bidder supplies only the ETH for whole auction lots. No REP deposit or approval is required. Each bid specifies the least REP acceptable per lot and a personal health target. That minimum REP must itself fully back the lot’s ETH commitment at the opening conservative price and chosen target. Winning bidders automatically become vault owners, with commitment equal to their accepted bid ETH. Each bid has a separate vault account controlled by its bidder, a small clone of one shared implementation whose owner, ledger, auction and bid are fixed at creation.

Lower REP-per-lot bids offer more ETH for the same REP, so they rank first. The auction accepts the largest number of lots that fit both its ETH target and the available REP at the marginal winner’s minimum:

Target reached: each winning lot receives the marginal winner’s minimum REP. Unsold REP remains with inherited claims.
Positive fill below target: all fresh auction inventory is sold, including when REP availability limits the fill. Winners receive the same grid-rounded REP backing per lot; the indivisible remainder belongs only to winning bids as REP credits.
No feasible lot: no REP is sold, and the inventory remains available for claim recovery.

Equal bids at the marginal bid limit share the remaining lots proportionally, with cumulative rounding to whole lots. That bid limit still determines which bids share a partial fill when the final REP per lot is higher. The contract reference defines the exact grid and rounding rules.

A new bid is rejected if strictly better funded bids already make winning impossible. A bid that could win when submitted can recover its full ETH before closing once later bids permanently rule it out. Anyone can credit that refund; the bidder then withdraws it and decides how to use the ETH, or credits and withdraws in one transaction. That combined withdrawal pays the bidder’s whole refund credit, including refunds already credited for its other bids, and skips a credit someone else already made. A provisional zero fill is not enough: equal-price rounding can change as more bids arrive. Bids that could still win remain binding until closing, and bids cannot be repriced or cancelled.

At closing, winning backing and commitments enter capital accounting immediately. A shared position preserves each bid’s funded obligations and fee rights until an owner or keeper splits it out. Delaying that transaction cannot omit a winner from aggregate backing or a later fork snapshot. Refunds are independent of that step. Keepers discover unmaterialized winners directly through the auction tree, skipping losing bids and positions already split out. The controlling wallet must still choose a branch before the next fork-choice deadline.

Choices close at week eight and bidding at week nine, even if preparation starts late. Funded prices must cover the maximum auction exposure and fresh inventory. Missing coverage or freshness at closing, or a higher closing conservative REP/ETH price than at opening, cancels the sale. Accepted ETH otherwise repairs inherited claims. Remaining recovery assets or a cash deficit keep the branch in runoff: existing claims can settle, but new purchases and ordinary holding fees stay closed.

There is no seller price floor. With weak demand, one funded lot can buy all fresh inventory. Revenue therefore depends on competitive entry; selling everything does not guarantee full repair. Winners take ordinary vault obligations and liquidation risk, without a minimum holding period. Surplus withdrawals and retirement against spare healthy capacity can release REP, so a full sale does not guarantee permanent security. Keeper participation depends on REP rewards covering execution costs.