Indicative Vote on the duration threshold for Stop-loss

Background and Summary:

  • Stop-loss is triggered when the slippage threshold (4%) is reached for an extended period of time. (T)
    • This duration threshold (T) is a parameter that reflects our trade-off between risk management and tolerance for unknown unknown.
    • Based on an on-going historical price analysis, all of our whitelisted strategies have exhibited a price behavior of less than 2h of depegging within the tolerance of 4% in the last 6 months. More information on Roadmap: Implementation of stop-loss vote (17)
    • However historical statistics can only serve as a reference and CANNOT provide guarantee to future behavior, there should be some buffer for unknown unknown regarding this duration threshold (T).
    • This is a vote that invites community to voice their opinion on the optimal duration for triggering stop-loss.
    • This duration parameter (T) would be enforced on all whitelisted strategies. In future the DAO could choose to shorten it regarding specific stablecoins have those stablecoins demonstrate a better price behavior.

As a starting point, an interval of 4h (double of the historical occurrence - 2h) is chosen:

  • less than 4h
  • 4h
  • 8h
  • 12h
  • 16h
  • more than 16h

0 voters

I think a higher margin of error initially (I personally vote 8h) is a good idea and could then revisit the parameter for future adjustment.