SIP-231: OffChain Circuit Breaker

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

Copyright and related rights waived via CC0.