SIP-231: OffChain Circuit Breaker

Author
StatusVote_Pending
TypeGovernance
NetworkOptimism
ImplementorTBD
ReleaseTBD
ProposalLoading status...
Created2022-04-19

Simple Summary

Formalize the functionality of the centralized circuit breaker specified in SIP-55, allowing spot and futures markets to be paused for a particular asset class when a deltaThreshold, is exceeded. Trading is resumed when the observedDelta goes back below the respective threshold.
It is important to mention that this SIP only formalizes the implementation of the centralized circuit breaker in a transparent fashion, the circuit breaker is already in place on the ethereum network and is already being used on optimism for pausing commodity and stables assets during times of inactivity.

Abstract

The centralized circuit breaker would pause, and resume trading based on the configurable SCCP parameters for each asset class. A deltaThreshold, equivalent to a multiple of the fees paid on a certain asset would offset the profit from the latency gap.

Motivation

The main motivation of this sip is to extend the functionality of SIP-55, to offset the oracle latencies. Currently dynamic fees can be calibrated further as to offset completely that price gap, however, this approach suffers from a determented UX with prolonged periods of high fees. The centralized circuit breaker would help provide a medium-term solution that allows us to provide traders with reasonable fees and minimal downtime, until the decentralized best execution pricing sip is launched.

ticker deltaThreshold # triggers per day down time per day in hours average down time in seconds sigma down time in seconds max downtime in seconds
eth 40 41 0.54 48 56 73
eth 45 30 0.36 44 50 70
eth 50 22 0.24 39 43 57
btc 40 24 0.27 42 45 72
btc 45 17 0.18 38 42 70
btc 50 12 0.12 35 40 65
link 45 39 0.2 18 14 49
link 50 25 0.12 18 12 53
link 55 16 0.07 17 11 42
link 60 11 0.05 16 12 38
link 70 5 0.02 15 11 57
sol 50 57 0.37 23 47 58
sol 60 30 0.17 21 28 50
sol 65 20 0.11 20 27 48
sol 70 13 0.08 21 29 46
sol 80 7 0.04 19 19 41
aave 60 49 0.3 22 23 56
aave 70 28 0.16 21 19 55
aave 75 22 0.12 20 18 63
aave 80 17 0.09 21 19 62
uni 50 52 0.34 24 20 63
uni 60 25 0.15 21 18 69
uni 65 20 0.11 20 17 69
uni 70 14 0.07 19 16 69
uni 80 8 0.04 19 15 66
avax 50 40 0.27 24 21 63
avax 60 19 0.12 22 20 61
avax 70 10 0.06 21 17 44
avax 80 7 0.04 20 16 33
matic 40 119 0.64 19 17 51
matic 50 50 0.25 18 15 49
matic 60 22 0.1 17 11 50
matic 70 10 0.04 16 10 49

Proposed parameters to be implemented are in bold and permit pDAO to update the parameters within a -10% + 10% margin of error once launched in order to have a better grasp of the parameters.

Commodities:

  • The proposed implementation could also be used as to gauge whether a price is active, since our oracle provider does not provide an oracle on the liveliness of the price.

Configurable Values (Via SCCP)

  • deltaThreshold: The absolute value of the delta seen between off-chain and on-chain prices that triggers pausing of trading.

Copyright and related rights waived via CC0.