How price markets work
Understand signed mass, psi, funding, and v24 settlement.
Signed pool accounting
v24 keeps active backing separate from signed effective mass. Conceptually, at the current oracle price:
effectiveMass = lpNeutralMass + fundingPoolMass
+ totalDeferredExitMass + recoveryCapitalMass
+ traderInterceptMass
+ traderNetSlopeSharesWad * price / 1e18
- traderFundingMass
psiWad = effectiveMass * 1e18 / activeBackingThe psi conversion requires positive effective mass and backing. Integer rounding is part of the implementation. Trader settlement uses the difference between pool mass before and after removing the actual position slice; summing independently rounded position values can differ from the executable result.
Position value and payout
With positive pool effective mass, a positive removed mass converts to gross collateral as removedMass * activeBacking / effectiveMass, rounded down. Protocol fees are deducted from the payout. Negative removed mass converts to debt with upward rounding, followed by authorized debtor coverage, Safety Reserve use, and uncovered-loss accounting.
If a positive close would leave insufficient effective mass, it requires your permission to defer. The position's directional exposure is removed and replaced by owner and protocol-fee mass claims. The owner's later collateral amount depends on the future conversion and claim headroom. It is not fixed at exit time.
Funding accounting
Configured funding uses utilization and skew to derive non-negative annualized long and short rates. Its clock, accrual-interval cap, market state, recipient eligibility, and risk headroom constrain accrual and booking.
Booking adds equal Funding Pool mass and trader funding liability, preserving effective mass at that step. An LP funding claim is a later conversion into collateral and has its own risk limit. Do not equate a quoted annualized rate with an unconditional realized LP yield.
To read the current rates, clock state, and effective leverage cap in one call, use poolMarketPolicyV24() on the pool. See Factories and lenses.
Admission and exits
The risk engine checks current and stressed effective mass, psi, exposure and collateral limits, leverage, and margin requirements. Stress shocks and thresholds come from the pool's risk profile; they are not universally fixed at 20%.
Ordinary exits, deferred exits, LP exits, and Recovery actions have different conditions. Read the action-specific quote and Recovery explanation. An unavailable or stale read cannot establish that an action is safe.