1. Background
1.1 The Ostium protocol is an open-source, decentralized trading protocol. On or about 15 July 2026, certain smart contracts deployed as part of the protocol were exploited by an unauthorized third party (the “Incident”), resulting in a loss of assets held by Ostium Liquidity Pool (“OLP”) depositors. Following the Incident, trading was paused and the affected smart contracts were frozen at Arbitrum block 484,137,016. 1.2 Ostium and its advisors have voluntarily undertaken efforts to recover a portion of the affected assets and have committed resources toward distributing recovered funds to affected OLP holders. This document sets out the terms on which holders of OLP at the time of the Incident may participate in that distribution through the Recovery Portal. In consideration of these efforts, each Participant is required to provide the release described in Section 7.2. Definitions
Capitalized terms used in these Terms have the meanings given below or elsewhere in these Terms. 2.1 “Chainalysis KYT” means the Chainalysis “Know Your Transaction” wallet screening tool used by the Ostium protocol. 2.2 “Allocation” means a Convenience Entitlement or a Recovery Entitlement, and “collect” means to submit, sign, and receive payment in respect of a Convenience Entitlement or Recovery Distribution through the Recovery Portal. 2.3 “Recovery Portal” means the online portal through which eligible holders may view, elect, and collect Allocations under the OLP Recovery Plan. 2.4 “Convenience Class” means the class of General Entitlements, each equal to or below the Convenience Entitlement Threshold or reduced to the Convenience Entitlement Threshold pursuant to a Convenience Class Election, that are eligible for payment from the Convenience Class Smart Contract. 2.5 “Convenience Entitlement” means the right of a member of the Convenience Class to collect payment of its Loss (or, following a Convenience Class Election, the Convenience Entitlement Threshold) in USDC from the Convenience Class Smart Contract, subject to these Terms. 2.6 “Convenience Entitlement Threshold” means 1,000 USDC. 2.7 “Convenience Entitlements Deadline” means the date that is 90 days after the launch of the Recovery Portal, as displayed on the Recovery Portal. 2.8 “Convenience Class Election” means the irrevocable election, described in Section 4.2, by which a holder of a General Entitlement above the Convenience Entitlement Threshold reduces its Allocation to the Convenience Entitlement Threshold in exchange for payment through the Convenience Class Smart Contract. 2.9 “Convenience Class Smart Contract” means the smart contract, funded as described in Section 4.3, from which Convenience Entitlements are paid. 2.10 “Election Deadline” means the date that is 30 days after the launch of the Recovery Portal, as displayed on the Recovery Portal. 2.11 “General Entitlement” means, for each wallet holding OLP at the Snapshot Block, an entitlement under the OLP Recovery Plan equal to that wallet’s Loss, as recorded in the Merkle tree referenced in Section 3.2. 2.12 “Recovery Entitlement” means the right of a holder of a General Entitlement above the Convenience Entitlement Threshold who does not make a Convenience Class Election by the Election Deadline to receive Recovery Distributions in respect of its Loss, up to a maximum of 100% of its Loss, recorded in the Recovery Entitlements Smart Contract and subject to these Terms. 2.13 “Recovery Class” means the class of General Entitlements recorded as Recovery Entitlements in the Recovery Entitlements Smart Contract. 2.14 “Recovery Entitlements Smart Contract” means the smart contract that records Recovery Entitlements and from which Recovery Distributions are paid. 2.15 “Recovery Distribution” means a pro rata payment made from the Recovery Pool to holders of Recovery Entitlements from time to time, as described in Section 5. 2.16 “Recovery Pool” means the pool of funds described in Section 5.3 from which Recovery Distributions are made. 2.17 “Snapshot Block” means Arbitrum block 484,137,016, recorded on 15 July 2026, being the block at which the affected smart contracts were frozen and at which OLP holdings were recorded for purposes of the OLP Recovery Plan.3. Eligibility and Loss
3.1 Every wallet that held OLP at the Snapshot Block is eligible for a General Entitlement under the OLP Recovery Plan, subject to the exclusions in Section 3.4. 3.2 “Loss” means, for each wallet, the number of OLP units held at the Snapshot Block multiplied by the difference between (a) the price of the underlying assets represented by OLP immediately prior to the Incident and (b) the price of those assets immediately following the Incident. Each wallet’s Loss is a fixed amount, determined as of the Snapshot Block and recorded in a Merkle tree published in connection with the Recovery Portal. Loss is calculated solely for purposes of the OLP Recovery Plan and does not include lost yield, staking or trading returns, gas or transaction fees, taxes, or any other consequential, incidental, or indirect losses. 3.3 Any OLP remaining in the vault following the Incident is not part of, and is not taken into account in calculating, any Allocation or payment under these Terms and is addressed separately from the OLP Recovery Plan. 3.4 Every wallet seeking to collect an Allocation through the Recovery Portal will be screened using Chainalysis KYT. A wallet is not eligible to collect an Allocation, and any General Entitlement otherwise associated with that wallet is void, if the wallet:- is, or Ostium reasonably believes is, controlled by or associated with the person or persons who perpetrated the Incident, or has received, directly or indirectly, any proceeds of the Incident;
- is owned or controlled by, or is acting on behalf of, a person that is a Sanctioned Person;
- is owned or controlled by, or is acting on behalf of, a person located or ordinarily resident in a Restricted Jurisdiction; or
- is flagged by Chainalysis KYT or otherwise identified by Ostium as presenting a sanctions, money-laundering, terrorist-financing, or other legal or regulatory risk.