Known limitations

Every matched position is collateralized in the sense that both legs sit in program-controlled vaults and no Rung key can move them. That is worth something. It is not the whole story.

The PreStocks mint grants its issuer a permanent delegate (they can move tokens out of the program’s vault), freeze authority (they can freeze the vault), and a pause switch (they can halt all transfers, so exercise and expiry cannot settle). No on-chain program can defend against these, because they are properties of the token rather than of this protocol.

A sharper case worth naming: if transfers are paused across a position’s expiry, the holder can lose their exercise window through no fault of their own. Rung does not extend the deadline to compensate.

PreStocks mints charge a transfer fee, so the amount sent is never the amount that arrives. Collateral passes through a vault twice — in on match, out on settlement — and is charged both times, currently around 1% rising to 2% when the mint’s scheduled fee increase takes effect. Against a premium of roughly 4.6% that is material, so the Reality Check shows it rather than absorbing it quietly. Rung does not subsidise or rebate it.

It shows capital actually committed at each valuation level. That is a stronger signal than a poll, because expressing it costs something. It is still not an estimate of what a company is worth:

• premium and expiry affect willingness independently of conviction
• a single large wallet can dominate a band, so concentration is shown alongside
• participants may be hedging exposure held elsewhere
• committed capital is bounded by who happens to be present

A target valuation is converted to a fixed token strike once, using PreStocks mark data at creation, and then frozen. Later changes to the mark, the implied share count or the mint’s scaled-amount multiplier do not alter an existing agreement — by design, since an agreement that silently rewrote itself would be worse. But an old position’s stated target describes the world at the moment it was created.

• No secondary market: a position cannot be transferred or sold.
• No partial fills: a commitment is taken whole or not at all.
• The maker cannot exit after matching. They sold protection and are committed for the full term. This is deliberate.
• Open commitments may never match.
• No automated premium pricing. Nothing here claims a fair value.
• Rent on the two vault accounts is not reclaimed.

• Unaudited. Built for a hackathon under a deadline. It should not custody funds anyone cannot afford to lose.
• The devnet demo uses a Token-2022 mint reproducing the real transfer-fee behaviour. It is labelled as a mock wherever it appears; it is not a real PreStock.
• Valuation data is live and real in every environment.
• PreStocks may be restricted in some jurisdictions. Rung is experimental software and is not investment advice.