What can stop a redemption
The underlying issuer's levers, disclosed.
Daybreak never chooses to stop a redemption. The only things that can are powers held by the underlying's issuer, the company that issued the tokenized stock, plus the ordinary requirement that your destination account can receive the token.
The issuer's levers
Every compliant tokenized equity ships with these powers. They are admitted with disclosure, because no compliant tokenized equity ships without them.
| Lever | What the underlying's issuer can do | Effect on Daybreak |
|---|---|---|
| Permanent delegate | Spend, seize, or burn any account's balance, the vault included. Rotate the delegate to a fresh key. | The one authority that can move the backing without Daybreak's signature. After a seizure the set is fractionally backed. |
| Pause | Globally halt transfer, mint, and burn of the underlying. | Mint and redeem fail closed and resume when the token resumes. |
| Freeze authority | Freeze individual accounts. | Freezing a holder blocks that holder. Freezing the vault halts redemption for everyone in that series. |
| Transfer hook (arming it) | Arm the underlying's transfer hook with a program. | New sets stop. In v1, redeem fails closed too, because the hot path re-checks the hook and the fixed transfer cannot carry a hook's extra accounts. |
Warning. Redeeming through an armed hook is a planned upgrade. Until it ships, an armed hook halts redemption for that underlying.
A reconciler watches for any of these firing (hook armed, pause flipped, default state changed, or a vault outflow the program did not sign) and treats it as an incident.
After a seizure
If the permanent delegate removes underlying from the vault, that series holds less than one underlying per complete set. Redemptions pay par first-come-first-served until the vault is exhausted. A holder who mints or buys after a seizure is not shielded from the shortfall. Full backing can be restored only by returning underlying to the vault; anyone may donate it, and it is credited to the series.
Your destination account
A redemption pays underlying to the destination account you pass. If that account is frozen or cannot receive the underlying, the transfer fails and the whole transaction reverts. Your partials are not burned. Fix the destination and retry.
What Daybreak cannot do
- Pause or gate redeem.
- Raise a fee above the committed cap, or change a fee without 24 hours' notice.
- Move the backing except by paying a redemption or withdrawing accrued fees.
- Freeze a partial token account. The partial mints have no freeze authority.
- Burn a partial outside of a redemption. Partial mints use the permissioned-burn extension, so every burn needs the program's co-signature, which it only gives inside
redeem.