Umotu Stablecoin Risk Disclosure Policy (RDP) v1.0
Status: Draft / v1 Owner: Umotu Foundation Applies to: Stablecoin listings, reward payout preferences, stable gas eligibility, and Umotu reference apps
- Purpose
Umotu is a decentralized Participation Protocol that supports multiple stablecoins and payout currencies to enable global access and respect monetary sovereignty.
Stablecoins and their reference fiat currencies may be subject to:
market volatility and exchange-rate discontinuities,
issuer operational failures,
redemption restrictions,
smart contract vulnerabilities,
regulatory actions.
The purpose of this Risk Disclosure Policy (RDP) is to:
provide transparent, objective risk indicators to users,
reduce the risk of users being unknowingly trapped in unstable or illiquid assets,
preserve Umotu's legitimacy as neutral infrastructure.
This policy does not guarantee asset safety, price stability, or purchasing power.
- Core Principles
RDP is governed by the following principles:
Neutrality Umotu does not evaluate, endorse, or oppose any sovereign currency.
Objectivity Risk flags are triggered by measurable conditions (e.g., volatility thresholds), not subjective judgment.
User Autonomy Users may select any supported stablecoin. Risk disclosure informs choices but does not prohibit use (except for specific technical safety reasons).
Transparency Risk indicators, triggers, and data sources are publicly documented.
Consistency The same rules apply to all currencies and issuers.
- Scope
RDP applies to:
Stablecoin payout preferences (e.g., selecting IRR1 as reward payout)
Stable gas eligibility (using stablecoins for gas via paymasters/relayers)
Stablecoin listing levels (Supported / Trusted / Gas-Eligible)
In-app risk warnings in Umotu reference apps (wallet, payout, reward screens)
RDP does not apply to:
user-created tokens,
third-party MiniApps (unless they opt-in),
off-chain financial advice.
- Risk Indicators (User-Facing)
Umotu reference apps may display the following indicators:
A) FX Volatility Indicator (Fiat Risk)
Shows recent exchange-rate volatility for the reference fiat currency.
Example labels:
Normal
Elevated volatility
High volatility
Currency shock detected
B) Peg Deviation Indicator (Stablecoin Market Risk)
Shows deviation of stablecoin market price from reference value (where price data exists).
Example labels:
On peg
Minor deviation
Significant deviation
Dislocation
C) Redemption / Liquidity Indicator (Issuer Risk)
Shows issuer's published redemption status and any known restrictions.
Example labels:
Redemption normal
Redemption delays reported
Redemption restricted
Redemption paused
D) Technical Risk Indicator (Smart Contract / Ops Risk)
Shows whether the stablecoin contract:
is verified,
audited,
upgradeable,
has freeze/blacklist controls,
has known incidents.
Example labels:
Standard
Upgradeable
Freeze-enabled
Incident reported
- Automated Trigger Rules (Rule-Based Flags)
Risk warnings must be triggered automatically when thresholds are met.
5.1 Currency Shock Event (CSE)
A Currency Shock Event is triggered if any of the following occurs:
24h FX move ≥ 30%, or
7d FX move ≥ 50%, or
multiple FX rates detected (official vs market divergence ≥ 20%) where data is available, or
capital controls / banking restrictions materially impact redemption access (issuer-confirmed), or
issuer declares emergency changes to redemption terms.
Upon CSE:
the app displays a "Currency shock detected" warning for relevant payout currencies
the currency is removed from default payout selection
users are prompted to consider a diversified payout basket
Note: CSE reflects volatility/discontinuity conditions only and does not imply judgment about the currency's legitimacy.
5.2 Peg Dislocation Event (PDE)
A Peg Dislocation Event is triggered if:
stablecoin market price deviates by ≥ 3% for ≥ 24 hours, or
stablecoin market price deviates by ≥ 10% at any time.
Upon PDE:
the app displays a "Peg deviation detected" warning
stablecoin is temporarily removed from Gas-Eligible status (if applicable)
users are warned before selecting it as payout preference
5.3 Redemption Restriction Event (RRE)
A Redemption Restriction Event is triggered if issuer:
pauses redemption,
introduces gating or significant delays outside published terms,
or fails to provide required disclosures.
Upon RRE:
stablecoin loses Trusted Stable status
stablecoin loses Gas-Eligible status
warning banners are displayed across wallet + payout selection
- Actions and Controls
When a trigger condition is met, the Umotu reference applications automatically apply the following default behaviors:
6.1 UI Warnings (Primary)
show warning banners
show risk badges next to stablecoin ticker
show "learn more" link to disclosure details
6.2 Default Settings Adjustments
remove token from default payout list
recommend diversified payout basket
6.3 Feature Restrictions (Limited and Technical)
Only when necessary to protect users/system integrity:
disable stable gas support for affected stablecoin
restrict use in auto-claim routing
move stablecoin to "restricted" category
6.4 Delisting (Last Resort)
Stablecoins may be delisted only under conditions such as:
insolvency / reserve deficiency,
contract compromise,
fraud,
persistent redemption failure,
or failure to meet U-SBA disclosure requirements.
Fiat devaluation alone is not grounds for delisting.
Delisting applies only to default wallet presentation. On-chain transferability remains unaffected.
Delisting requires time-lock except for verified technical compromise.
These actions apply only to default presentation and default routing in Umotu Foundation-maintained applications. They do not restrict protocol-level transferability or third-party usage.
- Payout Choice Warning Template (In-App)
When a user selects a payout stablecoin under elevated risk, the app must display a confirmation modal.
Example (CSE)
Title: High volatility detected Body: The selected currency has experienced large exchange-rate changes recently. Your reward value may change quickly. Consider diversifying payout. Buttons:
Use anyway
Choose diversified payout (recommended)
Example (PDE)
Title: Peg deviation detected Body: This stablecoin has deviated from its reference value recently. Consider using a different payout currency. Buttons:
Use anyway
Choose another stablecoin
- Data Sources & Integrity
Umotu Foundation will publish data sources used for risk indicators, which may include:
issuer disclosures
public market price feeds
independent FX references
on-chain DEX prices
redemption status updates
All indicators are "best effort" and may be delayed or incomplete.
- Disclaimer
Umotu is not a bank, broker, or financial advisor. Risk indicators are informational and do not constitute investment advice. Users remain responsible for their choices and for understanding stablecoin issuer terms, local laws, and currency risks.
- Governance & Updates
This policy may be updated by the Umotu Foundation with:
public draft publication,
a comment period,
and (where applicable) community governance vote.