FAQ

Forum

Head to https://forum.world.inc/ for more comprehensive FAQs.

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Q: How does liquidation work under extreme market moves? Any stress tests? What happens in a situation where the vault has to backstop an extremely large position, similar to what happened to HLP?

A: The liquidation engine protects users. Read ATLAS Math: Risk Based Valuation to understand the 'risk budget' users have available, and consequently when liquidation occurs. Read Liquidation & No ADLs to understand the worst case scenario. See Risk Parameters & Stats to see the asset-specific risk metrics. It's worth understanding Market Structure.

Q: Are there sub-account features for isolating positions?

A: Yes, Sub-accounts.

Q: What audit coverage exists?

Counterparty Risk

Q: What is the purpose of True Ups?

True Ups just realize unrealized PnL.

Q: What if the lending market becomes fully lent out, such that you cannot withdraw your USD/tokens?

Loans expire after 10 days. If there is no ability to borrow at all, then a lender must wait until the loan expires, which is a maximum of 10 days. It is unlikely WCM would ever be in a prolonged scenario in which there is no liquidity to borrow, due to arbitrage.