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.

Every PreStocks mint also carries an empty transfer hook slot the issuer can fill at any time. Rung does not pass a hook’s accounts, so if one is set the program refuses new positions on that PreStock, and positions already matched cannot settle until Rung is upgraded to support it.

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. Rates vary by mint and can change with the issuer's fee schedule; the asset page reads the current rate from chain. Against a premium of a few percent 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.

A matched position is a put, so P&L is measured against letting it expire, when each side simply takes back its own collateral. Only two things move value between the parties: the premium, and on exercise the swap of the vault’s tokens for the strike. The two sides’ figures are therefore exact opposites.

• A live position counts the swap only when exercising would pay the holder, at today’s market price. That is intrinsic value; no time value is modelled, because that would be a claim about fair price, which Rung does not make.
• An exercised position values the delivered tokens at today’s market price. The program clears its escrow record at settlement, so the delivered quantity is taken from the required amount, which the escrow was sized to hit.
• An expired position is final: only the premium changed hands.
• Transfer fees are excluded. They go to the token issuer, not to the counterparty, and are shown separately wherever they apply.

• No secondary market: a position cannot be transferred or sold.
• Partial fills must meet the minimum slice size and cannot leave an untakeable remainder.
• The maker can withdraw unmatched capital, but cannot exit a holder's matched claim. 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.
• Capped at $1,000 per position. The program itself refuses a larger strike, which bounds what any one position can lose to a bug. Raising the cap takes a program upgrade.
• Upgradeable by one key. The program’s upgrade authority is a single key held by its developer, which could change the code that controls the vaults. Treat that as part of the trust you extend.
• 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.