Simple Summary

Apply going forward the same market closure mechanism, currently applied on stocks, on commodities and forex synths.

Abstract

Freezing the below mentioned synths until the market is open and a fresh price is pushed. To clarify, no trades on the contracts will be possible when markets are closed.

  • sEUR
  • sJPY
  • sAUD
  • sCHF
  • sGBP
  • sXAU
  • sXAG
  • sOil
  • iOil

Motivation

During market closures, it is not possible for oracle prices to be updated. The reason for this is because when the major futures and spot markets are closed prices are no longer updating. This creates a risk that when the market is aware of a likely gap up or down upon reopening that traders can enter a position on the wrong price, frontrunning this likely gap in prices when the market opens. The core assumption of synthetix is that the oracle price feeds reflect an efficient and liquid market and that is generally not the case for these synths during market closures. Therefore it is prudent that we apply the same mechanism already in place for both FTSE and NIKKEI to prevent exchanges at times when markets are closed. Please note that synths can still be transferred and traded on other venues even during market closure.

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