Contract tiers
Every perpetual market carries a contract tier: A, B, C, Speculative, HighlySpeculative or Isolated, ordered safest to riskiest. Everything on this page derives from that one value, and one admin instruction changes it. A newly created market defaults to HighlySpeculative, so a market has to be explicitly promoted to a safer tier, never demoted into one by accident.
A market's tier is a live, admin-adjustable value, not a property of the asset. Which market sits in which tier should be read from the in-app market list or the onchain market account, not from this page. The numbers attached to each tier below are the stable reference.
Insurance coverage
How much a market may ever draw from the shared Insurance Fund vault is capped by its tier.
| Tier | Insurance cap |
|---|---|
| A | $100,000,000 |
| B | $1,000,000 |
| C | $100,000 |
| Speculative | $0 |
| Highly Speculative | $0 |
| Isolated | $0 |
Bad debt in a Speculative, Highly Speculative or Isolated market never reaches the shared vault. It is absorbed by the estate, the market's own in-transit insurance fee and the AMM fee-provision clawback, then socialized across that market's own traders. See Liquidation and bankruptcy.
Oracle tolerance
A sample whose confidence interval exceeds the tier's tolerance is graded too uncertain, which blocks or degrades margin calculations, fills and liquidations. The sanitization band is how far one new data point may move the market's running oracle TWAPs.
| Tier | Confidence tolerated | TWAP sanitization band |
|---|---|---|
| A | 2% of price | ±10% of the running TWAP |
| B | 2% of price | ±20% |
| C | 4% of price | ±50% |
| Speculative | 20% of price | ±33%, the protocol default |
| Highly Speculative | 100% of price | ±33%, the protocol default |
| Isolated | 100% of price | ±33%, the protocol default |
The sanitization band is not monotonic across tiers. Tier C's 50% band is wider than the roughly 33% that Speculative, Highly Speculative and Isolated fall back to, so do not assume "riskier tier, wider TWAP band".
Settlement divergence
Unrealized P&L cannot be settled to or from an account's collateral if either the oracle-to-TWAP divergence or the market's tracked oracle-to-mark standard deviation breaches its per-tier threshold.
| Tier | Max oracle/TWAP divergence | Max oracle/mark standard deviation |
|---|---|---|
| A | 50 bps | 200 bps of price |
| B | 50 bps | 200 bps of price |
| C | 100 bps | 500 bps of price |
| Speculative | 250 bps | 1,000 bps of price |
| Highly Speculative | 250 bps | 1,000 bps of price |
| Isolated | 250 bps | 1,000 bps of price |
This is separate from the exchange-wide 10% and 50% bands on Guard rails, and much tighter: on a tier A market, half a percent of oracle drift stops settlement.
Funding divergence clamp
Funding is sized off the gap between the mark price and the oracle, so the tier clamps how large a gap the funding calculation is allowed to see.
| Tier | Clamp |
|---|---|
| A, B | 3% of the oracle TWAP |
| C | 5% of the oracle TWAP |
| Speculative, Highly Speculative, Isolated | 10% of the oracle TWAP |
A tier A market whose mark sits 8% away from the oracle TWAP therefore funds as though the gap were 3%, and the remaining 5% is not paid. See Funding rates.
Auction price bands
Where the program derives a baseline auction for an order it did not receive explicit prices for, the tier bounds how wide that auction may be, and how far from the oracle TWAP it may start.
| Tier | Minimum auction buffer | Maximum auction buffer |
|---|---|---|
| A | 10 bps | 2% |
| B | 10 bps | 5% |
| C | 20 bps | 5% |
| Speculative | 1% | 10% |
| Highly Speculative | 2% | 20% |
| Isolated | 2% | 20% |
Tier also sets the auction duration floor: 40 seconds per 1% of auction price spread for tiers A and B, 24 seconds for C and the tail tiers, clamped to between 0.4 and 72 seconds. See Auctions.
Trigger price clamp
Where the exchange is configured to use a median trigger price rather than the raw oracle, the tier bounds how far that median may sit from the live oracle price before a stop or take-profit fires on it.
| Tier | Trigger clamp |
|---|---|
| A, B | 20 bps |
| C | 100 bps |
| Speculative, Highly Speculative, Isolated | 250 bps |
The median is clamped rather than rejected, so a manipulated median can pull a stop no more than 20 bps off oracle on a tier A market, against 250 bps on a tail-tier one.
AMM drawdown cutoff
The AMM cuts itself out of fills when it has lost too much within the current funding period. Two gates must trip together: net revenue since the last funding update, and that same drawdown as a share of the AMM's retained fee capital.
| Tier | Quote gate | Percentage gate |
|---|---|---|
| A | net revenue at or below -$10,000 | 2% |
| B | net revenue at or below -$10,000 | roughly 3% |
| C | net revenue at or below -$5,000 | 4% |
| Speculative, Highly Speculative, Isolated | net revenue at or below -$5,000 | 5% |
When the cutoff fires, the orderbook is the only liquidity left in that market for the rest of the period.
The Isolated tier constrains the account
Tiers A through Highly Speculative only change a market's own risk limits. Isolated additionally constrains the account holding the position, and all of these reject with IsolatedAssetTierViolation:
- One perp liability. While the account holds a liability, position or order in an Isolated-tier market, it cannot carry a liability in any other perp market.
- Cross-margin trading must be off. An account with margin trading enabled cannot hold a position in an Isolated-tier market, and entering one means disabling the other.
- No non-quote spot liabilities. Any spot liability must be a single borrow in the quote asset.
- Reduce-only is the escape hatch. All three checks are skipped for an account already in reduce-only, so an account that ends up over these limits, for instance after a re-tier underneath it, is pushed into reduce-only rather than left stuck.
Tier and liquidation sequencing
Tier feeds liquidation in exactly one place: a keeper cannot settle a riskier-tier market's negative P&L against a liquidatee's deposits while that account still holds an open liability in a safer tier. The safer-tier liability goes through ordinary liquidation first.
Margin requirements themselves, the initial and maintenance margin ratios and the IMF factor, are configured per market and are not derived from the tier.
What this means in practice
A re-tier changes every limit on this page at once, on one instruction. If a market is re-tiered underneath an open position, none of the assumptions above carry over.
Below tier C there is no insurance. A Speculative-tier position is priced on the assumption that any bad debt in that market reaches every open position in it through socialized loss, with only the market's own in-transit fee and the AMM fee provision in between.