Understanding Epochs

The withdrawal system operates using two types of time intervals:

Normal Epochs

Duration:

• Each normal epoch typically lasts 3 days, but the duration can be adjusted depending on protocol requirements. However, the epoch duration cannot be shorter than 1 day.

Calculation:

• The current epoch is calculated using:

  $$\text{Current Epoch} = \frac{\text{Current Timestamp} - \text{Start Time}}{\text{Epoch Duration}}$$
• Any fractional part is discarded, resulting in discrete epoch numbers.

Usage:

• Normal epochs manage daily withdrawal requests and short-term pool dynamics.

Example:

• If the protocol launched on January 1, 2025, at 00:00:00 UTC with a 3-day epoch duration, then:

  • Epoch 0: January 1, 2025 – January 3, 2025, 23:59:59

  • Epoch 1: January 4, 2025 – January 6, 2025, 23:59:59

  • Epoch 2: January 7, 2025 – January 9, 2025, 23:59:59

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Global Epoch

Duration:

• A global epoch lasts 7 days.

Purpose:

• At the end of each global epoch, the system aggregates trading results to update the fixed collateralization level.

Collateralization Update:

• The pool's asset value is compared against the previous baseline.

• If the pool’s value exceeds the baseline, a predefined percentage (e.g., 40%) of the profit is extracted to establish a new baseline.

Example:

• If the pool value increases from 10,000 USD to 11,000 USD during the global epoch:

  • Profit: 1,000 USD

  • Profit extraction (40%): 400 USD

  • New fixed collateralization level: 11,000 USD – 400 USD = 10,600 USD

Impact on Profit Sharing:

• Profits are distributed only if the pool’s value exceeds this baseline.

• If the pool does not meet or exceed the baseline, profits are not distributed, and losses are carried over to the subsequent epoch.