> ## Documentation Index
> Fetch the complete documentation index at: https://mintlify.com/reserve-protocol/reserve-index-dtf/llms.txt
> Use this file to discover all available pages before exploring further.

# Frequently Asked Questions

> Common questions about Reserve Folio protocol

## General Questions

<AccordionGroup>
  <Accordion title="What is Reserve Folio?" icon="circle-question">
    Reserve Folio is a protocol for creating and managing portfolios of ERC20-compliant assets entirely onchain. Folios are designed to be used as a single source of truth for asset allocations, enabling composability of complex, multi-asset portfolios.

    Think of it as an onchain index fund or ETF, but fully decentralized and programmable.
  </Accordion>

  <Accordion title="How is Folio different from other index protocols?" icon="circle-question">
    **Key Differentiators:**

    1. **Sophisticated Rebalancing:** Dutch auction system with configurable price ranges and basket-level optimization
    2. **Governance Flexibility:** Three-tier role system allowing different levels of control and time sensitivity
    3. **High Fidelity:** Designed to maintain precise allocations even under timelock delays
    4. **MEV Protection:** Integration with trusted fillers (CoW Swap) for better execution
    5. **Composability:** Can be used as collateral or building block in other DeFi protocols
  </Accordion>

  <Accordion title="What chains does Folio support?" icon="circle-question">
    Folio works on any EVM-compatible chain with block times ≤ 30 seconds.

    **Commonly targeted chains:**

    * Ethereum Mainnet
    * Base
    * Arbitrum
    * Optimism
    * Polygon

    See [Chain Assumptions](/resources/chain-assumptions) for details.
  </Accordion>

  <Accordion title="Is Reserve Folio audited?" icon="circle-question">
    Yes! Multiple comprehensive audits by leading firms:

    * Trust Security (v1.0.0)
    * Cantina Competition (multiple versions)
    * Trail of Bits (v2.0.0, v4.0.0)
    * Pashov Audit Group (v4.0.0+)

    See [Security Audits](/resources/audits) for full details.
  </Accordion>
</AccordionGroup>

## Using Folios

<AccordionGroup>
  <Accordion title="How do I mint Folio tokens?" icon="circle-plus">
    To mint Folio tokens:

    1. Approve each collateral token for the Folio contract
    2. Call `mint(uint256 shares, uint256 minAmountOut)` with desired share amount
    3. The Folio calculates required token amounts pro-rata
    4. Tokens are transferred from your wallet
    5. Folio shares are minted to your address

    **Fees:** Mint fee applies (configurable, minimum 15 bps)

    See the [Minting & Redeeming guide](/guides/minting-redeeming) for details.
  </Accordion>

  <Accordion title="How do I redeem Folio tokens?" icon="circle-minus">
    To redeem Folio tokens:

    1. Call `redeem(uint256 shares)` with the amount to redeem
    2. The Folio calculates token amounts pro-rata to your share
    3. Your Folio shares are burned
    4. Collateral tokens are sent to your address

    **Fees:** No redemption fee (only mint and TVL fees)

    **Note:** You receive all tokens in the basket proportionally.
  </Accordion>

  <Accordion title="What fees do I pay?" icon="percent">
    **Two types of fees:**

    1. **TVL Fee (Management Fee):**
       * Charged continuously on AUM
       * Minimum: 15 bps annually
       * Maximum: 10% annually
       * Implemented as share inflation
    2. **Mint Fee:**
       * Charged on minting
       * Minimum: 15 bps
       * Maximum: 5%
       * No redemption fee

    **DAO Fee Floor:** 15 bps goes to ecosystem DAO (can be lowered by DAO)

    See [Fee Structure](/concepts/fees) for details.
  </Accordion>

  <Accordion title="Can I use Folio tokens as collateral?" icon="coins">
    Yes! Folio tokens are standard ERC20 tokens and can be used as collateral in other DeFi protocols.

    **Considerations:**

    * Check for read-only reentrancy with `stateChangeActive()`
    * Folio composition can change through rebalancing
    * Value should be calculated based on underlying assets
  </Accordion>
</AccordionGroup>

## Rebalancing & Auctions

<AccordionGroup>
  <Accordion title="How does rebalancing work?" icon="balance-scale">
    Rebalancing follows a structured process:

    1. **Start Rebalance:** `REBALANCE_MANAGER` sets target weights and price ranges
    2. **Open Auction:** `AUCTION_LAUNCHER` or anyone (after delay) opens an auction
    3. **Bidding:** Anyone can bid on token pairs during the auction
    4. **Repeat:** Multiple auctions can run during the rebalance
    5. **Complete:** Rebalance completes when targets are met or TTL expires

    See [Rebalancing](/concepts/rebalancing) for comprehensive details.
  </Accordion>

  <Accordion title="What is a Dutch auction?" icon="gavel">
    A Dutch auction starts at a high price and decreases over time until a buyer accepts.

    **In Reserve Folio:**

    * Price decays exponentially from `startPrice` to `endPrice`
    * Designed so ideal clearing price (with slippage) lies between bounds
    * First bidder to accept current price wins
    * Can be filled partially or fully

    **Benefits:**

    * Price discovery
    * No order book needed
    * MEV-resistant (with tight ranges)
  </Accordion>

  <Accordion title="Can I participate in auctions?" icon="hand-holding-dollar">
    Yes! Auctions are permissionless by default.

    **To participate:**

    1. Call `getBid()` to see current auction state
    2. Call `bid()` with desired fill amount
    3. Send buy tokens, receive sell tokens

    **Requirements:**

    * Must meet the current price ratio
    * Must have approved buy token
    * Some Folios may restrict to trusted fillers only

    **Profit opportunity:** Buy at better prices than secondary markets during rebalancing.
  </Accordion>

  <Accordion title="What are trusted fillers?" icon="handshake">
    Trusted fillers are whitelisted entities that can provide async fills for auctions.

    **Current Implementation:** CoW Swap integration

    **Benefits:**

    * Better prices through professional market makers
    * MEV protection
    * Access to off-chain liquidity

    **Configuration:** Can be enabled/disabled per Folio by governance

    **Restrictions:** Some Folios may disable permissionless bids and only allow trusted fillers.
  </Accordion>

  <Accordion title="Why did the rebalance fail?" icon="triangle-exclamation">
    Common reasons:

    1. **TTL Expired:** Rebalance time-to-live ran out
    2. **Price Excursion:** Market prices moved outside approved ranges
    3. **Auction Launcher Offline:** No one opened auctions during restricted period
    4. **Insufficient Liquidity:** No bidders at auction prices
    5. **Governance Action:** Rebalance manually ended

    **Recovery:** Start a new rebalance with updated parameters.
  </Accordion>
</AccordionGroup>

## Governance

<AccordionGroup>
  <Accordion title="What are the three roles?" icon="users">
    Folios have a three-tier governance system:

    1. **DEFAULT\_ADMIN\_ROLE:**
       * Expected: Timelock of Slow Folio Governor
       * Powers: Add/remove assets, set fees, configure roles
       * Use: Major structural changes
    2. **REBALANCE\_MANAGER:**
       * Expected: Timelock of Fast Folio Governor
       * Powers: Start/end rebalances, set rebalance parameters
       * Use: Operational rebalancing decisions
    3. **AUCTION\_LAUNCHER:**
       * Expected: EOA or multisig
       * Powers: Open auctions within approved ranges
       * Use: Timely auction execution with market awareness

    See [Roles](/concepts/roles) for details.
  </Accordion>

  <Accordion title="How do I propose changes?" icon="file-pen">
    Changes are proposed through the governance system:

    1. **Create Proposal:** Submit proposal to appropriate governor
    2. **Voting Period:** Token holders vote
    3. **Timelock:** Successful proposals enter timelock
    4. **Execution:** After delay, proposal can be executed

    **Which Governor?**

    * Slow Governor: Structural changes (add/remove tokens, fees)
    * Fast Governor: Rebalancing operations
    * Direct: `AUCTION_LAUNCHER` for auction timing
  </Accordion>

  <Accordion title="What is the AUCTION_LAUNCHER role?" icon="rocket">
    The `AUCTION_LAUNCHER` is a semi-trusted role that opens auctions.

    **Responsibilities:**

    * Open auctions promptly when rebalancing is needed
    * Provide up-to-date price estimates (if price control enabled)
    * Optimize basket weights (if weight control enabled)
    * End rebalances if market conditions become dangerous

    **Limitations:**

    * Can only operate within governance-approved ranges
    * Cannot prevent permissionless auctions (after delay)
    * Cannot steal funds (but can cause value leakage in some configurations)

    **Fallback:** If offline, anyone can open auctions after restricted period.
  </Accordion>

  <Accordion title="Can governance rugpull users?" icon="ban">
    **Short answer:** Not immediately, but governance has significant power.

    **Protections:**

    * Timelock delays on major changes
    * Cannot directly steal user funds
    * Users can redeem during timelock period

    **Risks:**

    * Can add malicious tokens (users should redeem before they're added)
    * Can set unfavorable rebalance parameters
    * Can change fees (within limits)

    **Best Practice:** Monitor governance proposals and redeem if you disagree with changes.
  </Accordion>
</AccordionGroup>

## Staking

<AccordionGroup>
  <Accordion title="What is the StakingVault?" icon="layer-group">
    The StakingVault holds staked Folio tokens and distributes rewards.

    **Features:**

    * Stake Folio tokens
    * Earn multiple reward tokens simultaneously
    * Voting power for governance
    * Configurable unstaking delay

    **Use:** Central voting token for all Folio governance types.
  </Accordion>

  <Accordion title="How do rewards work?" icon="gift">
    Rewards are distributed continuously based on staked balances.

    **Mechanism:**

    * Rewards drip at a configurable rate
    * Rate decays with a half-life (exponential decay)
    * Multiple reward tokens supported simultaneously
    * Claim anytime

    **Configuration:** Controlled by StakingVault owner (Community Governor).
  </Accordion>

  <Accordion title="What is the unstaking delay?" icon="clock">
    An optional delay before staked tokens can be withdrawn.

    **Purpose:**

    * Prevent governance attacks (stake, vote, unstake)
    * Align long-term interests
    * Security for optimistic governance

    **Configuration:** Set by StakingVault owner, can be 0 (no delay).
  </Accordion>

  <Accordion title="Can I lose my staked tokens?" icon="triangle-exclamation">
    In v5.0.0+, yes - through optimistic governance slashing.

    **Mechanism:** `StakingVault.burn()` function

    **Use Case:** Slash malicious governance proposers in optimistic governance systems

    **Risk:** Only applies if the Folio uses optimistic governance patterns

    **Mitigation:** Don't propose malicious governance actions.
  </Accordion>
</AccordionGroup>

## Technical Questions

<AccordionGroup>
  <Accordion title="What tokens are supported?" icon="circle-check">
    **Supported:**

    * Standard ERC20 tokens
    * Tokens with missing return values
    * Tokens that revert on zero-value transfers
    * Flash mintable tokens
    * Rebasing tokens (Folio only, with caveats)

    **NOT Supported:**

    * Multiple entrypoints
    * Pausable / blocklist (USDC, USDT risky)
    * Fee-on-transfer
    * ERC777 / callback tokens
    * Rebasing tokens (StakingVault)

    See [Token Compatibility](/resources/token-compatibility) for details.
  </Accordion>

  <Accordion title="What are the decimal limits?" icon="calculator">
    **Folio Collateral:** ≤ 27 decimals

    **StakingVault Tokens:** ≤ 21 decimals

    **Reason:** Prevents overflow with D18/D27 precision multipliers.

    See [Valid Ranges](/resources/valid-ranges) for more limits.
  </Accordion>

  <Accordion title="How do I check for reentrancy?" icon="shield">
    Before relying on Folio state in external contracts:

    ```solidity theme={null}
    (bool rebalanceActive, bool asyncActionActive) = folio.stateChangeActive();
    require(!rebalanceActive && !asyncActionActive, "State change active");
    ```

    **Why:** Protects against read-only reentrancy

    **When:** Before reading Folio balances or using Folio tokens as collateral
  </Accordion>

  <Accordion title="What is the unit system?" icon="ruler">
    Folio uses a comprehensive unit system with precision multipliers:

    * **D18:** 1e18 precision (percentages, ratios)
    * **D27:** 1e27 precision (prices, exchange rates)
    * **{tok}, {share}, {reward}:** Token amounts
    * **{s}:** Seconds

    **Examples:**

    * `D18{1}`: Percentage with 18 decimals
    * `D27{tok/share}`: Token per share ratio
    * `D27{UoA/tok}`: Price in nanoUSD per token

    See [Unit System](/resources/units) for details.
  </Accordion>

  <Accordion title="Can I fork/deploy my own Folio?" icon="code-fork">
    Yes! Reserve Folio is open source.

    **Steps:**

    1. Clone the repository
    2. Review deployment scripts
    3. Configure parameters
    4. Deploy via governance deployer
    5. Initialize with tokens and settings

    **Requirements:**

    * RoleRegistry deployment
    * FolioDAOFeeRegistry setup
    * Governance structure

    See [Development](/development/setup) for details.
  </Accordion>
</AccordionGroup>

## Troubleshooting

<AccordionGroup>
  <Accordion title="Why did my mint fail?" icon="xmark">
    Common reasons:

    1. **Insufficient Allowance:** Approve all collateral tokens first
    2. **Insufficient Balance:** Don't have enough of one or more tokens
    3. **Below Minimum:** Output below `minAmountOut` parameter
    4. **Zero Output:** Would receive 0 shares (add more tokens)
    5. **Token Transfer Failed:** One of the collateral tokens reverted

    **Solution:** Check allowances, balances, and token compatibility.
  </Accordion>

  <Accordion title="Why can't I redeem?" icon="xmark">
    Possible reasons:

    1. **Insufficient Balance:** Don't have enough Folio shares
    2. **Token Removed:** A token was removed from basket (rare, governance action)
    3. **Rebalancing Issue:** Temporary issue during rebalance (unlikely)

    **Solution:** Check your share balance and Folio basket composition.
  </Accordion>

  <Accordion title="Where is my token?" icon="magnifying-glass">
    If a token doesn't appear after redeeming:

    1. **Check Balance:** View token balance in wallet
    2. **Add to Wallet:** Manually add token contract address to wallet
    3. **Check Basket:** Verify token is still in Folio basket
    4. **Check Transaction:** Review transaction logs for transfers

    **Remember:** Redemptions are pro-rata - you get small amounts of each token.
  </Accordion>

  <Accordion title="My transaction is expensive!" icon="dollar-sign">
    Gas costs vary significantly by chain:

    * **Ethereum Mainnet:** \$50-200+ (high)
    * **Base/Optimism:** \$1-5 (low)
    * **Arbitrum:** \$0.50-2 (very low)
    * **Polygon:** under \$0.50 (very low)

    **Tips:**

    * Use L2s for lower costs
    * Wait for low gas periods (weekends, late night UTC)
    * Batch operations when possible
  </Accordion>
</AccordionGroup>

## Getting Help

<Card title="Need More Help?" icon="question">
  **Resources:**

  * 📚 [Full Documentation](/introduction) - Comprehensive guides
  * 💬 Community Discord - Ask questions
  * 🐛 [GitHub Issues](https://github.com/reserve-protocol/reserve-index-dtf/issues) - Report bugs
  * 🛡️ [Security](/resources/bug-bounty) - Report vulnerabilities

  **Before asking:**

  1. Search this FAQ
  2. Check relevant documentation section
  3. Review example transactions on block explorer
  4. Provide details: transaction hash, wallet address, error message
</Card>

## Related Documentation

<CardGroup cols={2}>
  <Card title="Glossary" icon="book" href="/resources/glossary">
    Terms and definitions
  </Card>

  <Card title="Quickstart" icon="rocket" href="/quickstart">
    Get started quickly
  </Card>

  <Card title="Examples" icon="code" href="/development">
    Code examples and tutorials
  </Card>

  <Card title="API Reference" icon="file-code" href="/api-reference/core/folio">
    Contract documentation
  </Card>
</CardGroup>