Main Street Liquidity and Recovery Update We have been evaluating potential ways to accelerate liquidity for holders, including limited early unwinds combined with open-market token purchases and burns. Economically, this approach may be accretive under the right conditions. Selling selected positions and using the proceeds to purchase tokens below their redemption value could improve overall coverage and potentially allow the recovery process to move more quickly. However, following the unwind of the more liquid portion of the portfolio, the protocol’s coverage ratio, excluding the insurance fund, is now close to 100.00% based on current valuations and methodology. Following consultation with counsel, we do not believe it would be appropriate to deliberately undertake transactions that would reduce coverage below this level, even temporarily. As a result, we are not currently able to execute early unwinds or material buybacks unless they can be completed without compromising coverage. We have continued working with counsel to assess whether the process can be accelerated while remaining within the appropriate legal, operational and risk parameters. Based on the current maturity schedule, the first material liquidity from the remaining box positions is expected in just over 30 days. Assuming the relevant positions settle as expected, the protocol should receive additional liquidity and coverage headroom. At that point, subject to updated coverage calculations, market conditions and any further legal considerations, we intend to begin placing measured limit orders in the open market. Proposed Buyback Process Our current intended approach is as follows: • Limit orders would initially be placed in the open market at varying prices, allowing holders who want earlier liquidity to decide whether to sell into them. • Tokens purchased by the protocol through this process would be burned or otherwise permanently removed from circulating supply. • Any improvement in coverage resulting from purchases below redemption value would be assessed before additional liquidity is deployed. • Where coverage permits, we would evaluate whether selected box positions could be unwound early without reducing coverage below the required level. • We do not presently intend to enter into private bilateral purchase arrangements. Initial purchases would be made through the market so that available liquidity is accessible to holders on equal terms. We understand that many holders would prefer faster liquidity and that some holders have approached us with offers to sell at a discount. Although we would like to accommodate these requests sooner, any action must remain consistent with the protocol’s coverage requirements and the applicable legal and operational framework. We will continue evaluating opportunities to accelerate the process where they can be implemented responsibly and without adversely affecting the overall position of holders. Morpho Redemption Process We are also developing changes intended to support a fair and orderly resolution of the affected Morpho market. Under the existing structure, a recovery in market pricing or liquidity could create a first-come, first-served outcome. Liquidations would become profitable for liquidators as msUSD/msY peg improves via buybacks. This will create a situations where users able to withdraw first could potentially receive a disproportionate benefit while other lenders remain unable to withdraw, due to the accrued interest which is significant due to the market being at 100% utilisation for an extended period of time. To address this risk, the proposed design would restrict transfers of the msY held inside the affected Morpho contracts and introduce a dedicated redemption mechanism for the associated Morpho positions. The objective is to prevent outcomes from being determined solely by withdrawal timing and to establish a more equitable process for affected lenders. This avoids a first come first serve race to the exits where early exiting users end up with extremely high APY on their lending positions whilst others are permanently left trapped in the vault/market. This restriction would apply specifically to msY held within the affected Morpho structure. It is not intended to restrict the transferability of msY held elsewhere. The proposed design remains subject to final legal, technical and security review. It will require contract development, testing and an independent audit before implementation. The precise mechanics, eligibility requirements and redemption process will be published before the system becomes operational. Summary Our priority remains protecting the overall position and treating holders fairly. Current coverage levels limit the amount of liquidity that can be deployed immediately. The first material maturity from the remaining portfolio is expected in just over 30 days. Assuming settlement occurs as expected, this should provide additional liquidity and flexibility to begin measured open-market purchases. Any subsequent purchases or early unwinds will depend on realized liquidity, updated coverage calculations, prevailing market conditions and applicable legal and operational considerations. We will provide further updates as we approach the first material maturity and as the proposed buyback and Morpho redemption processes progress. All dates, transaction sizes and proposed actions described above represent current estimates or intentions and should not be treated as guarantees. Actual timing and outcomes may change due to settlement, market, technical, legal or operational factors. Thank you for your continued patience.