AmuShield
Last updated
Last updated
AmuShield provides parametric protection for users' deposited assets with the following core components working together:
Vault manager
Receives data 24/7 on the underlying pool's Current Price and triggers Amulet vault for vault suspension and emergency retrieval of residual funds in case of loss of funds to an attack on the pool.
Amulet Vault
Suspends vault operations to prevent further increase in exposure, then systemically attempts to retrieve any residual funds from the underlying pool. Meantime, the underlying pool may return funds recovered or pay compensation to the vault.
Amulet Safety Fund
Provides some basic financial coverage to compensate users from available capacity for losses sustained.
The vault manager receives Current Price data on yield bearing tokens (e.g. amtSOL) and trading pairs (e.g. FRAX/crvUSD). The Current Price represents the amount of assets in a pool versus the supply of LP tokens that has a claim on the assets in said pool. A drastic drop in the Current Price would indicate that large amounts of assets were likely stolen rather than redeemed from the pool. The Trigger Price represents the level of which the Current Price must at least drop below to trigger the vault's suspension, execute emergency retrieval of assets from the pool into the vault for user withdrawals, and for the users to qualify for any claim payout from the Amulet Safety Fund.
Formulas for Staking's Current Price and Trigger Price:
Current Price
Asset / LP token supply
Trigger Price
(1 - stop loss) * maxhistorical(Current Price)
Example:
Lido's ETH staking pool was exploited for 30 ETH out of the pool's total of 100 ETH. 100 wstETH were previously issued to the stakers for the 100 ETH staked in the pool. Trigger Price stop loss is set to 20%.
Pre-Exploit Current Price = 100 ETH /100wstETH = 1.00 ETH
Post-Exploit Current Price = 70 ETH /100wstETH = 0.70 ETH
Trigger Price = (1 - 0.2) * 1.00 ETH = 0.80 ETH
As Post-Exploit Current Price < Trigger Price, vault suspension and emergency asset retrievals are executed. Any residual assets retrieved from the underlying pool is stored in the vault for user withdrawal. Basic financial coverage is provided as far as possible by the Amulet Safety Fund for losses incurred.
The Amulet Safety Fund ("ASF") will initially consist of only $AMU tokens and funds accumulated from protection fees charged on yield from Amulet's strategies. It is important to note that the ASF only offers a limited and basic level of financial protection against actual losses incurred and according to available capital in the ASF. It does not guarantee complete coverage of all assets. As Amulet continues to expand and develop, it plans to gradually introduce the following features to the ASF:
User Empowerment: Unlocks user access to protection fees for safeguarding assets with AmuShield.
Resilience Alliances: This feature aims to strengthen protection in Web3 by forging alliances with safety partners. It’s designed to provide unparalleled security within the ecosystem.
Risk Sharing Amplified: This component of the AmuShield focuses on enhancing risk sharing capabilities. It leverages the capital for broader protection and opens up opportunities for more lucrative risk sharing prospects.
Checkout Amulet Safety Fund for details on cover capacity, claim payouts, and shield cost.
Our system ensures that every opportunity for compensation from a strategy's compromised underlying pool is identified and leveraged accordingly. You don't have to pursue them yourself. Let Amulet handle the burden of keeping track of blockchain records for monitoring, retrieving, and delivering compensation payments to you.
The vault's address is also tracked by the underlying pool for the payment or return of any eventual compensation package or funds recovered by the underlying protocol.
