🐋
Moby
  • Let’s Get Started
    • 🐋 About Moby
    • ⚡ Our Vision
    • 🤓 Your Guidebook
      • Get Setup
        • Connect Wallet
        • Trade Options
        • 0DTE Options
        • Provide Liquidity
      • Fees & Instruments
        • Fee Generation
        • Fee Distribution
        • Instruments
      • Testnet
  • How it’s Built
    • 🚀 Synchronized Liquidity Engine (SLE)
    • 🧮 Options Pricing Model
      • Mark Price
        • Futures Index
        • Implied Volatility
      • Risk Premium
        • Deriving Greeks
        • Risk Premium Calculation
        • Risk Managing Mechanism
    • 🤖 Architecture
      • Liquidity Provision Mechanism
      • Options Listing Standard
      • How to Open / Close / Settle Position
      • Synchronized Liquidity Engine (SLE)
      • Options Position Tokens
      • Tools to Maximize Capital Efficiency
    • ⚙️ Key Features
      • High Leverage & Limited Risk with No Liquidation
      • Narrow Spread with Dynamic Risk Premium
      • Guaranteed Settlement
      • Capital Efficiency Improvements with Combo Options
      • Even Higher Capital Efficiency with Clearing House
      • Abundant Liquidity for All Options
      • Composable Options for Structured Products
      • High Profitability for LPs
      • Real-Time Automatically Hedged OLP
      • Upcoming Features
    • ⛓ DeFi Options Vault
      • 🐻 Berachain DeFi Options Vault
        • 🔒 Architecture
        • 📈 Options Strategy
  • How it’s Driven
    • 🛡️ Building the Safest DeFi Protocol
      • Safety Features
      • Smart Contract Audit & Real-Time Security Monitoring
    • 🏛 Backed by Decentralized Governance
      • Governance
    • 🌐 Led by the Best Partners & Community
      • Arbitrum X Moby
      • Engagement Programs
  • Need More Info?
    • 📚 Resource Library
      • Developer Resources & Educational Contents
      • Terms & Conditions
      • Glossary
      • FAQ
  • Developers
    • Moby Traders API
      • REST API
        • General
        • Account
        • Market
    • Trade Scripts
      • Prerequisites
      • Open Positions
      • Close Positions
    • Interfaces & ABI
      • PositionManager.sol
      • SettleManager.sol
      • RewardRouterV2.sol
      • OptionsMarket.sol
    • Appendix 1: Parameters for Open/Close Options
    • Appendix 2: the Diff between optionId and optionTokenId
    • Appendix 3: Sample Moby Contract Module for Developers
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On this page
  • Preventive Measures against Miner Extractable Value (MEV) and Front-running
  • Risk Hedging Mechanism for Liquidity Providers
  • Preventive Measures for Risk Caused by Inaccurate Data Feed
  1. How it’s Driven
  2. 🛡️ Building the Safest DeFi Protocol

Safety Features

Preventive Measures against Miner Extractable Value (MEV) and Front-running

  • All orders on Moby are placed in an on-chain queue and executed in order, ensuring the highest level of fairness for all traders

  • At execution, the calculation of pricing and risk premiums considers both the Greeks profile of OLPs as well as external market data such as futures and implied volatility

  • This approach effectively prevents the prediction of profits through exploitative strategies such as Miner Extractable Value (MEV) and front-running

Risk Hedging Mechanism for Liquidity Providers

  • Moby's Dynamic Risk Premium model incentivizes or applies additional charges to traders based on how their positions influence Moby OLPs’ Greeks risk

  • The Dynamic Risk Premium thus effectively steers traders to consistently open positions in favor of retaining a Greeks-neutral state for Moby’s OLPs

  • Even in a theoretically extreme situation where traders largely take positions that could adversely affect Moby's OLP Greeks risk, the Dynamic Risk Premium model responds by significantly raising spreads to discourage such trades and prevent OLPs’ risk exposure

Preventive Measures for Risk Caused by Inaccurate Data Feed

  • To ensure the accuracy of pricing and risk management, real-time data is gathered from multiple sources, including major CEXs and a mix of on / off-chain oracles such as Block Scholes, 1inch, and Chainlink to mitigate systematic error

  • Should there still be any error in the data despite such precaution, Moby’s trade execution layer halts operation and thereby prevents the execution of erroneous transactions

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Last updated 1 year ago