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Protocol Parameters (V2)

The parameters below describe the default economic and risk configuration enforced by the Panoptic V2 RiskEngine.

For a given Panoptic V2 pool, all parameters are enforced by an immutable RiskEngine contract referenced at deployment time. While these values are not stored as static constants, the logic producing them is immutable for the lifetime of the pool.

Collateral Parameters
​

These parameters govern collateral requirements for option buyers and sellers.
Collateral requirements may vary based on pool utilization, token type, and oracle state.

SELL_COLLATERAL_RATIO
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Default (baseline): 20%
Effective range: 20% → 100%

Baseline collateral ratio required to sell an option, expressed as a percentage of the option’s notional value.

  • Applies when pool utilization is below TARGET_POOL_UTIL
  • Increases linearly toward full collateralization as utilization approaches SATURATED_POOL_UTIL
  • Enforced dynamically by the RiskEngine

BUY_COLLATERAL_RATIO
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Default (baseline): 10%
Minimum: 5%

Baseline collateral ratio required to buy an option.

  • Applies when pool utilization is below TARGET_POOL_UTIL
  • Decreases linearly as utilization increases
  • Reaches its minimum at SATURATED_POOL_UTIL
  • Designed to incentivize utilization-reducing positions during congestion

TARGET_POOL_UTIL
​

Default: 50%

Utilization inflection point for collateral logic.

  • Below this value, baseline collateral ratios apply
  • Above this value:
    • seller collateral requirements increase
    • buyer collateral requirements decrease

SATURATED_POOL_UTIL
​

Default: 90%

Utilization level at which:

  • sellers are required to post 100% collateral
  • buyers reach their minimum collateral requirement

This level maximally discourages additional borrowing while incentivizing utilization-reducing actions.

BP_DECREASE_BUFFER
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Default: TBD (bps)

A multiplicative buffer applied during solvency checks following actions that may reduce buying power, including:

  • minting options
  • force exercising another account

This buffer prevents users from placing themselves immediately into a liquidatable state through their own actions.

CROSS_BUFFER
​

A multiplier applied to the account’s cross-collateral solvency threshold when checking solvency.

Internally, solvency compares:

  • balanceCross (the account’s cross-collateral value)
    vs
  • thresholdCross * crossBufferBps / 10_000 (the required threshold with buffer applied)

This buffer is used to enforce stricter solvency during actions that can reduce buying power (e.g., minting, force exercise, or collateral withdrawals).

Default: 10_000 (no additional buffer, i.e., 1.00×)

Premium & Spread Parameters
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These parameters control how option premiums scale with liquidity usage and how much liquidity may be removed from a given chunk.

VEGOID
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Default: 2

Controls the curvature of the premium multiplier applied to option buyers.

  • Lower values increase convexity (premiums rise faster with utilization)
  • Higher values smooth premium growth
  • Used in the premium multiplier equation governing streamia

MAX_SPREAD
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Default: 9x

Maximum allowed ratio of removed liquidity to remaining liquidity within a single liquidity chunk.

  • Caps effective liquidity imbalance
  • Limits the maximum premium multiplier paid by option buyers
  • Enforced during minting and burning of positions

effectiveLiquidityLimit (per mint)
​

User-specified

Optional per-position spread limit supplied by the caller during mint.

For long legs, the enforced spread limit is:

min(effectiveLiquidityLimit, MAX_SPREAD)

Fee Parameters
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Fees in Panoptic V2 are applied dynamically and may vary based on builderCode.

COMMISSION_FEE (Notional Fee)
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Default: 0.01%
Applied on: position open

Fee charged on the notional value of both bought and sold options at mint.

  • Distributed to lenders in the corresponding tokenType collateral vault
  • Functions as interest for liquidity borrowed by option sellers

COMMISSION_FEE_P (Premium Fee)
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Default: 0.1%
Applied on: position close

Fee charged on net premium accumulated by an options position when closed.

  • Distributed to lenders in the corresponding tokenType collateral vault

Builder Codes
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Builder codes are fee-routing codes.

When a trade is executed through the Panoptic V2 RiskEngine, the caller may provide a builderCode. If the code is valid, it deterministically resolves (via CREATE2) to a BuilderWallet address that can receive a portion of protocol fees.

When a builder code is active, fee shares are split as follows:

  • 65% → Protocol (sent to the RiskEngine address)
  • 25% → BuilderWallet (sent to the BuilderWallet derived from builderCode)
  • 10% → User (10% fee discount, trader only pays 90% of fees)

If builderCode = 0, there is no builder recipient, and lenders of that pool proportionally receive the full fee.

This fee routing applies to commissions charged when opening positions (notional fees) and when closing positions (premium fees).

Force Exercise Parameters
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Force exercise costs are computed dynamically based on oracle state and position configuration.

FORCE_EXERCISE_COST
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All long legs are out of range: 0.01%
Any long leg is in range: 1.024%

Fee paid by the force exercisor to the force exercisee, applied to the notional value of long legs.

  • If all long legs are out of range, the lower fee applies
  • If any long leg is in range, the higher fee applies
  • Enforced dynamically by the RiskEngine

Oracle Parameters
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Panoptic V2 does not rely on external price oracles.
All oracle logic is derived from Uniswap-style price observations and internal aggregation.

Oracle Update Cadence
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~64 seconds (epoch-based)

Oracle state may be updated at most once per epoch.
Updates are permissionless via pokeOracle().

Oracle Construction
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Internal median + EMA smoothing

The internal oracle system tracks:

  • EMA-smoothed ticks (fast, slow, long-horizon)
  • Median-derived ticks from rolling observations
  • A reconstructed latest observation tick

Stale Oracle Protection
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Enabled

If oracle ticks diverge excessively or become stale:

  • the RiskEngine may enforce conservative solvency assumptions
  • safe mode may be triggered
  • certain actions (e.g. minting) may be restricted

Miscellaneous Parameters
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MAX_OPEN_LEGS
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uint64 constant MAX_OPEN_LEGS = 25;

Maximum number of legs permitted across all open positions for an account on a single Panoptic pool.

This limit ensures all positions remain liquidatable within practical gas limits.

Protocol Parameters for V1 and V1.1 (DEPRECATED)

Panoptic V1 and V1.1 have immutable parameters that factor into calculations for collateral requirements, oracle prices, streamia multipliers, and other key aspects of the protocol. The current parameters for pools created by the Panoptic V1 and V1.1 factories on Ethereum Mainnet are outlined below.

Collateral Parameters
​

These parameters are used to calculate the collateral requirements for options traders on Panoptic. Each Panoptic instance has two collateral vaults: one for each token in the Uniswap pool. Both vaults use the same collateral parameter values, but have separate pool utilization metrics. For any given option leg, the collateral ratio used will correspond to the pool utilization in the collateral vault for the Uniswap (token0 or token1) tokenType parameter in that leg.

SELL_COLLATERAL_RATIO
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uint256 immutable SELL_COLLATERAL_RATIO (bps) = 2_000 = 20%

The seller collateral ratio is the ratio of the collateral required to sell an option to the option's notional value (amount borrowed from PLPs). The collateral ratio remains at the parameter value for options minted when the pool utilization is between 0 and TARGET_POOL_UTIL. For options minted utilization=TARGET_POOL_UTIL and utilization=SATURATED_POOL_UTIL, the collateral ratio increases linearly to 100%.

BUY_COLLATERAL_RATIO
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uint256 immutable BUY_COLLATERAL_RATIO (bps) = 1_000 = 10%

The buyer collateral ratio is the ratio of the collateral required to buy an option to the option's notional value (amount of tokens held against borrowed liquidity chunk). The collateral ratio remains at the parameter value for options minted when the pool utilization is between 0 and TARGET_POOL_UTIL. For options minted between utilization=TARGET_POOL_UTIL and utilization=SATURATED_POOL_UTIL, the collateral ratio decreases linearly to BUY_COLLATERAL_RATIO / 2.

TARGET_POOL_UTIL
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uint256 immutable TARGET_POOL_UTIL (bps) = 5_000 = 50%

The target pool utilization acts as the inflection point for SELL_COLLATERAL_RATIO and BUY_COLLATERAL_RATIO. Once the pool utilization reaches this value, collateral requirements for sellers increase (discouraging further borrowing/utilization of tokens from the pool) and collateral requirements for buyers decrease (encouraging the return of borrowed funds deployed by sellers as liquidity in Uniswap to the collateral vault).

SATURATED_POOL_UTIL
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uint256 immutable SATURATED_POOL_UTIL (bps) = 9_000 = 90%

The saturated pool utilization is the point at which options sellers are required to post 100% of the option's notional value as collateral, and the point at which option buyers reach their minimum collateral requirement. Once the pool utilization reaches this point, the collateral requirements will maximally incentivize positions that decrease the pool utilization and maximally discourage positions that increase it.

BP_DECREASE_BUFFER
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uint256 immutable BP_DECREASE_BUFFER (bps) = 13_333 = 133.33%

This parameter is a multiplier applied to the total collateral requirement for a user during solvency checks after they perform actions which may decrease their buying power, namely, minting options or force exercising another user. The buffer ensures that users cannot cause their own account to go into a liquidatable state; insolvency should only occur after a significant price movement or long premium accumulation.

Streamia parameters
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These parameters help to determine the maximum amount of liquidity that can be borrowed from option sellers, and the multiplier over Uniswap fees owed by option buyers to option sellers.

VEGOID
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uint256 immutable VEGOID = 3

VEGOID is a parameter used to modify the premium multiplier equation: lower values of VEGOID result in an increased rate of increase in the premium multiplier as the percentage of sold liquidity borrowed in a chunk increases, while higher values of VEGOID result in a more gradual premium multiplier increase alongside increases in liquidity utilization.

The premium multiplier (over fees earned by an identical Uniswap position) paid by option buyers in a given liquidity chunk (consisting of strike, width, and tokenType) increases along with the percentage of sold liquidity borrowed in that chunk according to the equation linked above.

MAX_SPREAD
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uint256 immutable MAX_SPREAD (x2^32) = 9 * (2**32) = 9x

MAX_SPREAD defines the maximum value of removedLiquidity/remainingLiquidity (e.g. MAX_SPREAD=9x corresponds to a maximum 90% overall liquidity utilization). This serves to limit the multiplier on the premium paid by option buyers to option sellers: according to the premium multiplier equation, the maximum premium multiplier for a MAX_SPREAD of 9x is 3.25x.

Fee parameters
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These parameters define the fees corresponding to various actions on the Panoptic protocol.

COMMISSION_FEE
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uint256 immutable COMMISSION_FEE (bps) = 20 = 0.2%

The commission fee is the base fee charged on the notional value of both purchased and sold options when they are minted.

This fee is distributed to PLPs in the corresponding tokenType vault, serving as interest payments for tokens borrowed by option sellers.

The commission fee is also charged on PLP deposits and distributed to existing PLPs to discourage the capture of commission fees through just-in-time liquidity provision.

ITM_SPREAD_MULTIPLIER (Panoptic V1)
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uint256 immutable ITM_SPREAD_MULTIPLIER (bps) = 20_000 = 200%

The ITM spread fee is defined by ITM_SPREAD_MULTIPLIER * uniswapPoolFee, and is charged on the (absolute) intrinsic value of in-the-money option legs when they are minted. Like the COMMISSION_FEE, this fee also compensates PLPs for the risk of providing liquidity to the protocol. The fee is waived for options that do not perform ITM swaps (either by a user's choice to mint a covered position, or for options minted while the protocol is in safe mode).

ITM_SPREAD_FEE (Panoptic V1.1)
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uint256 immutable ITM_SPREAD_FEE (bps) = 20 = 0.2%

This fee serves the same role in Panoptic V1.1 as the ITM spread fee does in Panoptic V1, but it remains constant across all pools rather than being determined by a multiple of the Uniswap pool fee.

FORCE_EXERCISE_COST
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int256 immutable FORCE_EXERCISE_COST (bps) = -128 = 1.28%

The force exercise cost is the fee paid to the force exercisee by the force exercisor. The fee is charged on the notional value of the long legs in the position, and decreases by a factor of two for each half-leg-width the current tick is away from the strike (the leg with the largest amount of distance in half-leg-widths is used for this calculation). This discourages force exercising positions with legs that have just become out-of-range, but allows users with far-the-money positions to be force exercised cheaply to free up their liquidity so it can be moved closer to the current price.

Oracle parameters
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Panoptic does not use any external oracles, but instead utilizes onchain price observations from Uniswap V3-style oracles to generate manipulation-resistant price feeds. These parameters define the configuration for each of the price feeds that Panoptic constructs from Uniswap observations.

CARDINALITY_INCREASE (Ethereum Mainnet)
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uint256 immutable CARDINALITY_INCREASE = 51

The cardinality increase is the amount of Uniswap observation slots the Panoptic factory initializes (up to) on the oracle pool when a Panoptic instance is deployed. This value is determined by the average blocktime of the deployed chain; if observations are made at the maximum frequency (once per block), the cardinality should be sufficient to guarantee that the oldest observation in the pool is at least TWAP_WINDOW seconds old. Note that this guarantee only begins to hold once all the initialized observations are filled for the first time, so a Panoptic instance may not be safe to use until CARDINALITY_INCREASE - PREVIOUS_CARDINALITY observations are taken post-deployment.

TWAP_WINDOW
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uint256 immutable TWAP_WINDOW (seconds) = 600 = 10 minutes

The TWAP window defines the minimum window of time over which to calculate the TWAP price for solvency checks during a liquidation. The oldest Uniswap observation should be at least TWAP_WINDOW seconds old.

FAST_ORACLE_PERIOD (Ethereum Mainnet)
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uint256 immutable FAST_ORACLE_PERIOD = 1

The fast oracle period defines spacing between each observation used in the fast oracle price feed.

FAST_ORACLE_CARDINALITY (Ethereum Mainnet)
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uint256 immutable FAST_ORACLE_CARDINALITY = 3

The fast oracle cardinality defines the number of observations, starting at the latest observation and separated by FAST_ORACLE_PERIOD, over which to compute the median fast oracle price. This is the only price used to determine solvency during all protocol actions besides liquidations, except when the sum of the squares of the deltas between the fast, slow, current, and last observed tick exceeds MAX_TICKS_DELTA^2.

SLOW_ORACLE_UNISWAP_MODE
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bool immutable SLOW_ORACLE_UNISWAP_MODE = false

This parameter determines which oracle type to use for the "slow" oracle price on non-liquidation solvency checks. If false, an 8-slot internal median array is used to compute the "slow" oracle price. This oracle is updated with the last oracle observation during mintOptions if MEDIAN_PERIOD has elapsed past the last observation. If true, the "slow" oracle price is instead computed on-the-fly from SLOW_ORACLE_CARDINALITY oracle observations (spaced SLOW_ORACLE_PERIOD observations apart).

MEDIAN_PERIOD
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uint256 immutable MEDIAN_PERIOD (seconds) = 60 = 1 minute

The median period is the minimum amount of time permitted between internal median array updates.

SLOW_ORACLE_PERIOD (Ethereum Mainnet)
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uint256 immutable SLOW_ORACLE_PERIOD = 5

This slow oracle period defines the spacing between each observation used in the slow oracle price feed. Note: this configuration of the slow oracle is currently disabled (SLOW_ORACLE_UNISWAP_MODE = false).

SLOW_ORACLE_CARDINALITY (Ethereum Mainnet)
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uint256 immutable SLOW_ORACLE_CARDINALITY = 9

The slow oracle cardinality defines the number of observations, starting at the latest observation and separated by SLOW_ORACLE_PERIOD, over which to compute the median slow oracle price. Note: this configuration of the slow oracle is currently disabled (SLOW_ORACLE_UNISWAP_MODE = false).

MAX_TICKS_DELTA
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uint256 immutable MAX_TICKS_DELTA = 953

MAX_TICKS_DELTA is a threshold for the sum of the squares of the cumulative deltas between the fast, slow, current, and last observed tick. If one or more oracle ticks are stale enough that this threshold is exceeded during a solvency check, the protocol will enforce that the user is solvent at all oracle ticks (as opposed to just the fastOracleTick).

MAX_TWAP_DELTA_LIQUIDATION
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uint256 immutable MAX_TWAP_DELTA_LIQUIDATION = 513

MAX_TWAP_DELTA_LIQUIDATION defines the maximum allowed delta between the currentTick and the Uniswap TWAP tick (TWAP_WINDOW) during a liquidation (e.g. at MAX_TWAP_DELTA_LIQUIDATION = 513 this corresponds to ~5% down or ~5.26% up). Preventing liquidations when this threshold is exceeded ensures that manipulation of the currentTick is limited, reducing the extent to which a liquidation can occur at inaccurate prices in an unfavorable direction to the liquidatee.

Miscellaneous parameters
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These parameters define various other aspects of the Panoptic protocol.

MAX_OPEN_LEGS (Ethereum Mainnet)
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uint256 immutable MAX_OPEN_LEGS = 25

MAX_OPEN_LEGS defines the maximum number of legs permitted across all open positions for an account on an individual Panoptic pool at any given time. Each position, created through a mintOptions call, is a tokenId that can contain between 1 and 4 legs. All legs contribute toward the limit, regardless of how they are distributed across an account's positions. This limit ensures that an account can always be liquidated within the gas limit; the value may be raised or lowered on different chains depending on what that limit is.

MIN_ENFORCED_TICKFILL_COST
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The approximate minimum amount of tokens it should require to fill maxLiquidityPerTick at the minimum and maximum enforced ticks for a liquidity chunk in the SFPM.

uint256 immutable MIN_ENFORCED_TICKFILL_COST = 2100 * 10**18 = 2100 ether

NATIVE_ENFORCED_TICKFILL_COST (Ethereum Mainnet, Panoptic V1.1)
​

The approximate minimum amount of native tokens it should require to fill maxLiquidityPerTick at the minimum and maximum enforced ticks for a liquidity chunk in the SFPM. The value of this parameter may vary for chains with a native token other than ETH.

uint256 immutable NATIVE_ENFORCED_TICKFILL_COST = 2100 * 10**18 = 2100 ether

SUPPLY_MULTIPLIER_TICKFILL
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The multiplier, in basis points, to apply to the token supply and set as the enforced tick fill cost if greater than MIN_ENFORCED_TICKFILL_COST. In Panoptic V1.1, this multiplier does not apply to pools paired with the native token.

uint256 immutable SUPPLY_MULTIPLIER_TICKFILL (bps) = 10_000 = 100%
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