🛡️Safety Measures

Protective mechanisms that ensure the stability and security of the Fixed-Rate Lending Protocol

Overview

Safety Measures in the Fixed-Rate Lending Protocol are critical mechanisms designed to protect the system from extreme market conditions, price manipulation, and other potential risks. These features work together to ensure the protocol remains stable, secure, and reliable for all participants.

What You'll Learn

• How Mark to Market provides realistic appraisal of financial positions

• How Circuit Breaker prevents price manipulation and extreme volatility

• How Base Price Adjustment maintains fair pricing during market stress

• How Emergency Global Settlement protects the protocol in extreme scenarios

• How these safety mechanisms work together to ensure system stability

Key Components

• Mark to Market: Standard accounting practice for fair value assessment

• Circuit Breaker: Limits price deviations to prevent manipulation

• Base Price Adjustment: Ensures fair pricing during market stress

• Emergency Global Settlement: Protocol-wide safety mechanism for extreme scenarios

Related Resources

• Market Dynamics

• Orderbook Deep Dive

• Core Mechanics