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·Ravariant Labs ↗

Settlement.

One number settles everything. At the end of each window, the market reads the official index and divides every escrowed dollar. Nobody votes. Nothing is interpreted.

Where the number comes from.

The administrator publishes an index level every day; what it measures lives on the The index page. The settlement number is the change in that level over the window: the level at the end divided by the level at the start, minus one, with each endpoint averaged over five publication days so no single print decides anything.

The settlement math
STEP 1 · how much did credit stress rise this window?index at the endindex at the start1,320÷1,200− 1 =+10%stress rose 10%STEP 2 · where does 10% sit between the published floor and cap?the numberfloorcap(10−0) ÷ (40−0) =a quarterso every locked dollar dividessHY $0.25 · cHY $0.75a quarter to stress, the rest to calmThe whole contract is these two lines. Every input is published; anyone can check the math.
Two published prints, one division, one bounded ratio. Nothing else feeds settlement.

The rule.

Each window publishes a floor and a cap before it opens. At the end, however far the index climbed from floor to cap is the share of each dollar stress takes. Calm takes the rest.

The split
capfloorthe indexcalm$0.75stress$0.25where the index lands is how the dollar divides
Illustrative teaching band: floor 0, cap 40, the index lands at 10. A quarter of the way up, so stress takes $0.25 and calm takes $0.75. Live windows publish their own bands.
Four windows, four outcomes
$1calm 1.00calm windownumber at the floor$1calm 0.75stress 0.25mild stresslands low$1calm 0.50stress 0.50real stresslands high$1stress 1.00max stressnumber at the capthe two sides always sum to the same dollar
The same rule at four landings. The two sides sum to the same dollar every time.

Why settle on this number.

Why this level and not a spread quote or realized losses: the reasons live on the The index page.

Why the panic trade pays.

The index contains repricing, not just defaults. When fear spikes, the index climbs on its own. A stress holder who is right about fear gets paid at settlement, without selling at the top.

Edge cases.

  • Corrections follow the administrator's own rules, applied once.
  • If publication is interrupted, a published fallback extends the read to the most recent official levels.
Next: Series and continuity