Skew limits and OI caps
Per-asset open-interest caps as a share of Kimp Pool NAV, net skew caps, Verified Lane sub-caps and per-account position limits.
The Kimp Pool bounds its exposure with caps that scale with its own size. Every cap is expressed as a percentage of pool NAV, so capacity grows as liquidity grows and shrinks automatically if NAV falls. All caps are enforced by KimpMarket at the moment a position is opened or increased.
Definitions#
- Open interest (OI) on an asset is gross open notional: long notional plus short notional, in USD.
- Net skew on an asset is long notional minus short notional. It is the part of OI the pool actually carries.
- Pool NAV is defined in Mechanics.
Per-asset caps#
| Asset | OI cap (% of NAV) | Net skew cap (% of NAV) |
|---|---|---|
| BTC | 30% | 15% |
| ETH | 20% | 10% |
| XRP | 10% | 5% |
| SOL | 10% | 5% |
| DOGE | 10% | 5% |
| Total | 80% | 40% |
The net skew cap is 50% of each asset's OI cap. The sum of the OI caps is 80% of NAV, which matches the 80% utilization threshold used for instant withdrawals. See LP token.
Illustration#
The table below applies the caps to a hypothetical NAV of 10,000,000 USD. It is an arithmetic illustration, not a statement about actual pool size.
| Asset | OI cap | Net skew cap |
|---|---|---|
| BTC | 3,000,000 USD | 1,500,000 USD |
| ETH | 2,000,000 USD | 1,000,000 USD |
| XRP | 1,000,000 USD | 500,000 USD |
| SOL | 1,000,000 USD | 500,000 USD |
| DOGE | 1,000,000 USD | 500,000 USD |
Enforcement#
A trade is rejected if, after execution, it would:
- 1take the asset's OI above its OI cap, or
- 2take the absolute net skew above the net skew cap, or
- 3take the account's notional on that asset above its per-account limit.
Trades that reduce OI or reduce skew are always accepted, even when a cap is already exceeded. Caps can be exceeded passively when NAV falls. In that case the market accepts only reducing trades until NAV recovers or positions close.
Within the skew cap, the dynamic fee curve prices the imbalance. A trade that moves skew toward the cap pays up to 0.10% on top of the base fee.
Per-account limits#
| Limit | Open lane | Verified Lane |
|---|---|---|
| Maximum leverage | 3x | 5x |
| Maximum notional per account per asset | 25,000 USD | 250,000 USD |
Verified Lane positions draw from the same asset caps as the open lane. The Verified Lane also has its own sub-caps inside each asset's OI and skew caps, so that its higher per-account limits cannot consume an asset's entire capacity. Sub-cap values are set by governance before mainnet and published in the app. See Limits and rewards.
Other protections#
- Reduce-only on stale data. If an asset's index has no finalized update for 5 minutes, its market becomes reduce-only. See Edge cases.
- Circuit guard. An index move of more than 300 bps from the previous finalized value requires a two-thirds quorum of the active reporter set, else it is held for one epoch.
- TWAP settlement. Expiry uses 60 one-minute samples, which limits the effect of any single print.
- Guardian pause. The guardian Safe, 4-of-7, can pause markets. It cannot move funds or change caps.
Changing caps#
All caps and limits are parameters of KimpMarket and KimpPool. They change only through governance and a 48-hour timelock. A reduction does not force-close existing positions. It only restricts new exposure.