Risk controls
When something goes wrong, the protocol limits trading partly or fully. Below are all such mechanisms: what triggers them and what keeps working.
Market statuses
| Status | Open a position | Close a position | Liquidations |
|---|---|---|---|
ACTIVE | Yes | Yes | Through the book |
REDUCE_ONLY | No; opening orders are removed when the status changes | Yes, with reduce-only orders | Through the book |
PAUSED | No | No: orders are not accepted; TWAP, POV and conditional orders wait for the market to reopen | By pairing at the oracle price |
DELISTED | No | Positions are closed automatically at the final price | - |
- Who changes the status. Governance sets the statuses.
- New markets. A new market can open from an activation block: before it only reduce-only orders are accepted.
Delisting
- Final price. Governance sets it. If it does not, the average oracle price over the funding window is used.
- Orders. All orders of the market are removed, including conditional, TWAP and POV orders.
- Positions. At the end of the block every position in the market is closed at the final price.
Automatic mechanisms
| Mechanism | Trigger | What happens |
|---|---|---|
| Market auto-pause | Oracle price older than 10 blocks | The market is paused until the price is fresh again |
| Oracle circuit breaker | A price jump of more than 30% or 50 blocks without a price | The pair's price is not updated, only reduce-only orders and position closes are accepted |
| Trading halt | An invariant breaks or bad debt exceeds 10,000 USDC | Only reduce-only orders are accepted. Only governance can lift the halt |
| Withdrawal pause | A subaccount goes bankrupt with a deficit of 0.1 USDC or more | Withdrawals and transfers across the network are frozen for 50 blocks |
What keeps working during a trading halt
- closing positions and reduce-only orders;
- liquidations;
- deposits and withdrawals, unless the withdrawal pause is active;
- adding margin to positions.
Governance levers
- Oracle: pause a pair, lift the pause, lift the circuit breaker.
- Market: change the status and delist.
- Trading: halt and resume.
- Network: upgrade through
x/upgrade.
There is no single-party lever: every action goes through a proposal and a vote.