Fire the volatility circuit breaker when either the baseline or skew of a listing deviates too far from its respective GWAV.
Too small a threshold means the circuit breaker always fires, meaning users will be frequently be locked out from depositing/withdrawing.
Too large a threshold means the CB won’t detect possible attacks/large spikes.
LiquidityCBThreshold: 5% of NAV
This is the percentage of the NAV the pool must have in free liquidity before the liquidity circuit breaker fires.
I.e. if the pool is worth $50M, then if LiquidityCBThreshold = 5%, the pool must have at least $2.5M in USD available to trade, otherwise the circuit breaker fires.
The value needs to be sufficiently high so that the AMM has enough funds to arbitrage down volatility spikes/attacks, but not too high so as to always fire.
ivVarianceCBTimeout: 36 hours
skewVarianceCBTimeout: 36 hours
After the volatility circuit breaker stops firing there is a timeout, during which deposits/withdrawals are still blocked.
LiquidityCBTimeout: 72 hours
After the liquidity circuit breaker stops firing there is a timeout, during which deposits/withdrawals are still blocked.
This prevents an attacker from preparing a deposit/withdrawal to occur immediately after the circuit breaker fires.
The liquidity circuit breaker should very rarely fire. The times when it does fire should be treated with caution. A long cooldown period means that any volatility surface manipulation will have ample time to be arbitraged down by the market.
GuardianDelay: 7 days
This is a failsafe to ensure that if either circuit breaker continuously fires, Guardians have the ability to process deposits/withdrawals that have been signalled for at least 7 days.
BoardSettlementCBTimeout: 6 hours
When a board is liquidated (i.e. expires), deposits and withdrawals will be locked out while all positions on this board are settled.
AcceptableSpotPricePercentMove: 0.5% change from previous value
If the spot price (as measured by a ChainLink oracle) moves by more than this percentage, then all deposits/withdrawals are blocked until cache is called again.
WithdrawalFee: 0.003 (0.3%)
This is a small fee charged on withdrawn USD.
I.e. if a user withdraws funds worth $1000, they will receive $996. The $4 fee returns to the pool (and shared amongst remaining LPs).
This encourages users to stay in the pool and further reduces the possibility of any manipulation.
DepositDelay: 7 days
WithdrawalDelay: 7 days
When a user signals to deposit/withdraw, there has to be a delay between signalling and processing. If this delay is not present, then LPs would exit when the pool is doing well, hurting continuing LPs.
These delays introduce uncertainty which nullifies the edge entering/exiting LPs have with current information.
After the launch of Avalon, DepositDelay can be lowered to ~ 2 days.
Withdrawal delay can always be moderately long (~ 3 days).