---
description: Understanding global settlement
---

# Global Settlement

A key feature of the Volmex protocol is the global settlement or `settle` function, which enables the volmex.finance core multi-sig to shut down the system so that outstanding volatility tokens become a claim on the underlying collateral of the system. Inspired by MakerDAO's global settlement feature, global settlement similarly provides the Volmex protocol flexibility and is conducive to a healthy peg. Global settlement is intended to be a last resort, though can certainly be used.

Global settlement provides the ability to settle the `VolmexProtocol` contract at a specific price, `settlementPrice`. Once the `settle` function has been executed by the volmex.finance core multi-sig, the `redeem`function is disabled and the `redeemSettled`function is enabled. At this point, Ethereum Volatility Index Tokens (ETHV) (or other volatility tokens) are redeemable for the `settlementPrice`.  Conversely, the Inverse Ethereum Volatility Index Token (iETHV) would be redeemable for the amount of collateral required to mint one of each token less the `settlementPrice`.



