Main Street Update We wanted to provide a further update on the remaining box positions, the minter, and the Morpho market. The key point is that Main Street remains collateralized above 100% when valuing the remaining box positions at expiry. The boxes are expected to mature at $1, and our focus remains on liquidating them safely and efficiently as they move closer to expiry. We are continuing to actively monitor the remaining boxes. As these positions get closer to expiry, pricing generally improves and we are able to exit more of them without taking unnecessary haircuts. Whenever boxes can be sold in a way that is accretive and does not harm overall backing, we will continue to do so. As USDC is freed up, there will be two separate processes: 1. msY holders outside of Morpho For msY holders outside of the Morpho market, USDC will continue to be added to the minter and used to support the pool. This allows users to continue exiting through the normal pool/minter process as liquidity is restored. The minter will continue buying msY from the pool and redeeming/burning that supply over time. As more boxes are liquidated or mature, more USDC can be used to support this process, with the goal of continuing to reduce circulating msY supply outside of Morpho. 2. USDC lenders in the Morpho market Morpho needs to be handled separately because of the way Morpho v1.1 works under extreme utilization. Some looped borrowers are now accruing interest at very high rates. Over time, this can cause their debt to become larger than the value of their msY collateral, even when valuing msY at $1. This creates a technical bad debt issue inside the Morpho vault. It is important to be very clear: users who lent $1 of USDC into Morpho should receive $1 of USDC back. The issue is not around the original principal that was lent into the market. The issue is the excess interest that has accrued on top due to extreme utilization. That excess interest will effectively need to be sacrificed and remain as bad debt within the vault. This does not mean that lenders lose the dollar they originally lent. It means that the additional interest above principal cannot be safely paid out without creating unfair outcomes elsewhere. Because of this, the msY collateral currently inside the Morpho market will effectively remain there and be treated as written off from the rest of the system. The portion of backing associated with that msY will instead be allocated to USDC lenders in the Morpho market through a dedicated claim process. In practice, this means: msY outside of Morpho will continue to be bought through the pool/minter and redeemed over time. The circulating msY supply outside of Morpho will continue to be reduced as USDC becomes available. The msY left inside the Morpho market will remain there as the residual written-off supply. Morpho lenders will receive a separate USDC claim corresponding to the principal they originally lent. Once the remaining boxes have either expired or been liquidated, and the final amount of available USDC is known, we will create a dedicated claim contract for Morpho lenders. This ensures the process is based on final confirmed numbers and avoids creating unfair outcomes between different groups of users. The end state is designed to be clean: msY outside of Morpho is bought and redeemed through the minter until that circulating supply is reduced down, while the only remaining msY will be the written-off collateral inside the Morpho market. Morpho lenders will then claim USDC separately, and economically the system nets down as though the remaining redeemable msY supply has been reduced to zero. We understand that this has been a stressful period, especially for users affected by the Morpho market. The team is working through this carefully and methodically to avoid rushed actions that could create worse outcomes. The goal remains the same: continue liquidating boxes efficiently, restore liquidity through the minter for msY holders outside of Morpho, and ensure that Morpho lenders are able to recover the USDC they originally lent. We will continue to provide updates as more boxes are liquidated and as more USDC becomes available.