We describe an efficient one-pot procedure that "folds" acyclic triketones into structurally complex, pharmaceutically relevant tricyclic systems that combine high oxygen content with unusual stability. In particular, β,γ'-triketones are converted into three-dimensional polycyclic peroxides in the presence of H2O2 under acid catalysis. These transformations are fueled by stereoelectronic frustration of H2O2, the parent peroxide, where the lone pairs of oxygen are not involved in strongly stabilizing orbital interactions. Computational analysis reveals how this frustration is relieved in the tricyclic peroxide products, where strongly stabilizing anomeric nO→σC-O* interactions are activated. The calculated potential energy surfaces for these transformations combine labile, dynamically formed cationic species with deeply stabilized intermediate structures that correspond to the introduction of one, two, or three peroxide moieties. Paradoxically, as the thermodynamic stability of the peroxide products increases along this reaction cascade, the kinetic barriers for their formation increase as well. This feature of the reaction potential energy surface, which allows separation of mono- and bis-peroxide tricyclic products, also explains why formation of the most stable tris-peroxide is the least kinetically viable and is not observed experimentally. Such unique behavior can be explained through the "inverse α-effect", a new stereoelectronic phenomenon with many conceptual implications for the development of organic functional group chemistry.