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The Governance Scope regulates the governance processes and balance of power of the Sky Ecosystem. The Governance Scope must ensure that the resilient equilibrium of Sky Governance remains protected against all potential direct and indirect threats.
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This Article governs the correct and secure execution of Sky Governance processes for deploying and reviewing Executive Votes. This Article must protect against all forms of attacks, disruption and accidental failure by maximizing the transparency and resilience of the Sky Executive Process.
This subdocuments herein define critical processes and requirements concerning the Governance Security Module (GSM) Pause Delay.
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The current exceptions to the GSM Pause Delay are specified in the subdocuments herein.
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The CLIPPER_MOM contract manages the circuit breaker for vault types using Liquidations 2.0. The circuit breaker functionality allows a successful governance proposal to impose Sky Governance’s choice of limitations on liquidations for any or all of the vault types in the Sky Protocol.• Level 0 - Liquidations Enabled - The breaker is not tripped, new vaults can be liquidated and old liquidations can proceed.• Level 1 - New Liquidations Disabled - No new liquidations can take place.• Level 2 - New Liquidations and Resets Disabled - No new liquidations can take place. No existing auctions can be reset if they expire.• Level 3 - All Liquidations Disabled - No new liquidations, no resets, no bidding in active auctions.This functionality is exceptional because liquidations at non-market prices have the potential to be irreversibly damaging to both users and the Sky Protocol. The circuit breaker allows Sky Governance to attempt to limit the damage in the event of an issue affecting liquidations without waiting for the GSM Pause Delay.Additionally, the contract allows for permissionless activation of the circuit breaker, if the price decrease in a collateral exceeds a preset percentage value between oracle price updates. The permissionless activation triggers the circuit breaker at Level 2 because both new auctions and resets reference the current oracle price.When Level (0, 1, 2, 3) of liquidations circuit breaker is altered via Executive Vote, Sky Governance has the ability to set locked time, which is a specified duration which needs to pass before the liquidations circuit breaker can be triggered again via permissionless activation.The risk opened up by this exceptional functionality is that liquidations may be halted by an attacker in order to either:• Prevent an expensive liquidation.• Take advantage of a significant drop in collateral prices to mint unbacked USDS.
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Breaker Price Tolerance is a parameter which determines the condition for the permissionless activation of circuit breaker. Adjusting the Breaker Price Tolerance requires an Executive Vote, which is subject to GSM Pause Delay.The Breaker Price Tolerance is expressed as a number between zero and one, and works with the following equation:
next_oracle_price < current_oracle_price * breaker_price_tolerance.In instances where the price oracle model does not support the price delay function, the permissionless activation of the liquidation circuit breaker ceases to function, since there is no next oracle price.View Provenance
The Breaker Price Tolerance is: 0.5