Discontinuing membership before contract maturity

Contract default and other times Credits are burned as penalty

Membership Credits are locked in a smart contract for the duration of the membership contract. While the contract is in force, these Credits cannot be transferred or traded. As long as the Credits remain locked, membership is in force.

In case a member decides he wants to break the protection contract and terminate his membership ahead of maturity, a pre-agreed upon penalty will be imposed; a portion of the locked Credits will be burned and the remaining released to the member.

The rationale for this is that premature termination of the contract and unlocking of Credits introduces risk to the tDAO fund that needs to be corrected. Burning a portion of the Credits will offset the risk to the fund and result in restoring targeted risk levels.