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JACK STACK UPDATE — IMPORTANT PLEASE READ A structural issue has been identified in the current live contract design. What’s the issue? The intended design was: • 10% in • 10% out • Blood Bank / drip side carries the gamey reward risk • principal should still have a relatively safe floor after taxes That was the intention. What we discovered is that the current live contract does not isolate the Blood Bank strongly enough from the broader principal-backed stake pool over the long run. In plain English: Right now, this is not an immediate drain risk and funds cannot simply be magically emptied. But over time, if the Blood Bank gets low enough, reward-claim behavior can begin to eat into what was intended to be the safer principal floor. That was not how this was meant to be deployed. The intended design was: • Blood Bank risk stays on the Blood Bank side • principal keeps a safer floor after the 10% in / 10% out taxes Instead, the current live architecture allows that principal floor to be chiseled away over time once Blood Bank liquidity becomes weak enough. Important context This does not mean the contract is instantly broken or that user funds are suddenly gone. At the current moment: • funds are not simply drainable • everything is functioning mechanically • the issue is a long-horizon structural flaw in the game theory / reserve separation Because this has only been live a few days, the immediate practical risk is lower than the long-term design risk. What happens next I am planning to push a live upgrade through tonight to correct this. That said, I want to be honest: • live upgrades with user funds and accounting are serious • it may go smoothly • it may get messy • accounting and migration risk are real • I am going to do my best to protect user capital through this process Your two choices right now Option 1 — Exit now You can choose to exit now and preserve your capital roughly around the intended principal floor: • about 80% / 81% of what you put in • based on the 10% in / 10% out structure Option 2 — Stay in for the live fix You can stay in while I attempt the live upgrade tonight. The goal of that upgrade is to restore the originally intended separation: • Blood Bank remains the reward-risk side • principal floor is protected the way it should have been from the start Personal commitment I’m also making this clear now: If losses happen because of this design issue, I will personally do my best to cover them out of pocket if I have to — even for people who choose to exit now. Final plain-English summary The issue is not that the contract can instantly be drained. The issue is that: • once the Blood Bank gets low enough • and reward claims continue • the contract can begin paying yield out of what should have remained the safer principal floor That means the entire staked JACK pool can eventually become yield backing if left unchanged. That was not intended. More updates tonight.