The Smart Contracts on the basis of which the Stock Certificate Token are issued include a so-called Safeguarding function. With the Safeguarding function, the Stock-Tokenholders have a governance function enabling them to trigger the Redemption of Specific Stock Certificate Tokens.

Tokenholders can safeguard stake their Stock Certificate Tokens in the Smart Contract. Tokenholders can at any time unstake their Stock Certificate Tokens until the state of the Smart Contract changes from Active to Safeguard.

The Smart Contract irreversibly changes to Safeguard state if a simple majority of outstanding Specific Stock Certificate Tokens are staked. In Safeguard state, the administration of the Smart Contract is taken over by a predetermined guardian.

In Safeguard state, all transfers (specifically transfers of Stock Certificate Tokens to other pre-approved users) are suspended with the exemption of redemptions in accordance with 5.1 above.

As soon as the Smart Contract switches into Safeguard state, a process of liquidation is triggered. The Guardian will liquidate all Specific Underlying and Tokenholders of the staked Stock Certificate Token can claim the proceeds of the liquidation (pro rata) in USD stable coin through the Smart Contract.