MFN cascade

Last updated Jun 14, 2026

Replay favorable terms across all SAFEs that contain an MFN clause when a new instrument is more favorable.

Trigger

A new convertible was issued with terms more favorable than the prior stack.

Call sequence

1. List eligible MFN-bound convertibles

GET /v1/convertibles/mfn_eligibility?trigger={convertible}

2. Trigger cascade

POST /v1/convertibles/mfn_cascade  { trigger }

Idempotency

Cascade idempotent on `trigger`. Replays return the same amendment set.

Webhooks

Errors

Architecture

The cascade has two layers:

• Per-SAFE primitive — POST /v1/entities/{id}/convertibles/{id}/amend amends one SAFE at a time. Single counter-signature, single audit record. Useful for any non-cascade amendment (mutual modification, error correction).
• Orchestrator — POST /v1/entities/{id}/mfn_cascade iterates the primitive across every eligible SAFE at trigger time. Single call from the caller; per-SAFE results returned together for unified telemetry.

The primitive is the source of truth. The orchestrator's job is fan-out and fan-in.

Eligibility discovery

Before triggering anything, ask Matter which SAFEs would ratchet given the proposed round's terms. This is a dry-run discovery; nothing mutates.

GET /v1/entities/ent_Nq3KcAbc/convertibles/cascade_eligibility?hypothetical_round_id=rnd_seed_2026

{
  "object": "mfn_cascade_eligibility",
  "eligible_convertibles": [
    {
      "convertible_entry_id": "led_8n9PpkR3",
      "in_mfn_window": true,
      "proposed_terms_diff": {
        "valuation_cap_cents": { "before": 1500000000, "after": 1200000000, "more_favorable": true },
        "discount_rate":       { "before": 0.20,        "after": 0.20,        "more_favorable": false }
      }
    },
    {
      "convertible_entry_id": "led_2qV5jMxA",
      "in_mfn_window": false,
      "proposed_terms_diff": {}
    }
  ]
}

The in_mfn_window: false SAFE is past its mfn_window_months and is silently skipped on cascade — the holder no longer has the right to ratchet.

Cascade dispatch

The cascade is a corporate act. First, generate a Resolution authorising it (typically kind: priced_round_authorisation at the round close). Then fire the cascade:

POST /v1/entities/ent_Nq3KcAbc/mfn_cascade
Idempotency-Key: <uuid>
{
  "trigger_round_id": "rnd_seed_2026",
  "authorizing_resolution_id": "res_LqGcSdRb"
}

Response:

{
  "object": "mfn_cascade_dispatch",
  "per_safe_results": [
    {
      "convertible_entry_id": "led_8n9PpkR3",
      "status": "amendment_sent",
      "amendment_document_id": "doc_mfnAmend_001",
      "envelope_id": "env_88a1...",
      "proposed_terms_diff": { "valuation_cap_cents": { "before": 1500000000, "after": 1200000000 } }
    },
    {
      "convertible_entry_id": "led_2qV5jMxA",
      "status": "skipped_outside_window"
    }
  ]
}

Each amendment_sent row has emitted an mfn_amendment Document and opened a SigningEnvelope to the SAFE holder.

Holders sign or reject

Each SAFE holder receives the amendment via the SigningEnvelope. The signing capacity is convertible_holder. The holder either signs (the amendment binds, the SAFE's terms are updated) or rejects (the SigningEnvelope's counterparty_consent_status flips to rejected).

The round still closes either way. MFN was the SAFE-holder's right to claim, not a company obligation to enforce. A rejected amendment leaves the SAFE on its original terms; the rejection is logged on the SAFE's ledger entry. Standard market practice.

This is the load-bearing semantic of the cascade: per-SAFE outcomes diverge without blocking the round close.

What Matter does NOT do

The MFN cascade is purely corporate-financing. Matter does not transfer funds, does not run KYC on the SAFE holder for the amendment (that was done at original SAFE issuance), and does not interact with the holder's bank. The cascade produces signed amendment Documents and updated cap-table state; everything downstream lives elsewhere.

Related

• Issue a SAFE — the per-SAFE issuance flow that establishes the MFN clause this cascade ratchets.
• Issue a priced round — the close package; MFN cascade is typically triggered at close.
• No-op confirmation — applies to SAFEs that are MFN-eligible but past their window.