> For the complete documentation index, see [llms.txt](https://fxprotocol.gitbook.io/fx-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://fxprotocol.gitbook.io/fx-docs/risk-management/risk-parameters.md).

# Risk parameters

Please find the risk parameters of the protocol below. Note that all of them are adjustable by governance.<br>

## Global Risk Parameters

| Parameter                                                                                                                                             | Value      |
| ----------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- |
| Rebalance Line                                                                                                                                        | LTV = 88%  |
| Rebalance Bounty                                                                                                                                      | 2.5%       |
| Liquidation Line                                                                                                                                      | LTV = 95%  |
| Liquidation Bounty                                                                                                                                    | 4%         |
| Stability Pool TVL threshold under which keepers can use their funds to rebalance                                                                     | $10,000    |
| Leverage Range                                                                                                                                        | 1.1x - 7x  |
| Stablity Pool redemption Period                                                                                                                       | 60 minutes |
| Maximum amount USDC from the Stability Pool deposited on Aave Core ([FIP-12](https://forum.aladdin.club/t/fip-12-deploy-wsteth-to-aave-protocol/575)) | 80%        |
| Maximum amount of wstETH from the reserve deposited on Aave Prime ([FIP-12](https://forum.aladdin.club/t/fip-12-deploy-wsteth-to-aave-protocol/575))  | 80%        |

## Pegging Risk Parameters

| Parameter                                                                                | Value                                 |
| ---------------------------------------------------------------------------------------- | ------------------------------------- |
| Stability Pool peg arbitrage threshold                                                   | 0.3%                                  |
| Redemption fee                                                                           | 0.5%                                  |
| Max redeemed fxUSD proportion of xPOSITION at a time, starting with the highest leverage | 20%                                   |
| USDC depeg threshold to disable USDC deposits into the Stability Pool                    | USDC Oracle Price hits 0.995 or below |
| fxUSD distribution in the Stability pool - Threshold A                                   | 95%                                   |
| fxUSD distribution in the Stability pool - Threshold B                                   | 100%                                  |
| fxUSD Depeg threshold - funding threshold B                                              | Curve fxUSD/USDC EMA price hits 0.998 |
| Distribution of xPOSITIONs' collateral lent out to sPOSITIONs - Threshold C              | 45%                                   |
| Distribution of xPOSITIONs' collateral lent out to sPOSITIONs - Debt Cap                 | 50%                                   |
| fxUSD's upward depeg threshold                                                           | 1.002                                 |

## Parameters on Katana

| Parameter                                                                         | Value      |
| --------------------------------------------------------------------------------- | ---------- |
| Rebalance Line                                                                    | LTV = 70%  |
| Rebalance Bounty                                                                  | 2.5%       |
| Liquidation Line                                                                  | LTV = 77%  |
| Liquidation Bounty                                                                | 4%         |
| Stability Pool TVL threshold under which keepers can use their funds to rebalance | $10,000    |
| Leverage Range                                                                    | 1.1x - 3x  |
| Stablity Pool redemption Period                                                   | 60 minutes |


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