Caveats regarding the clamp

[xenide]

Say on an L2 (e.g. Arbitrum), if the sequencer goes down for a few hours, no swap would be able to take place. As such, the first swap that happens can swing the instant clamped (and of course raw) price a lot. In other words, the clamp becomes quite useless if there are no swaps for an extended period of time, or put it inversely, the clamp works best when there are frequent swaps.

e.g. with a 1bp/s rate of change, if there are no swaps for 2 hours (7200 s), the swap can move the price by 72% and it would not exceed the clamp.

Potential mitigations:

1. New borrows use the instant price in the case where there has been no oracle observation for X period
2. Liquidations use a longer TWAP (e.g. 1-hr TWAP) instead of the normal TWAP (10-15 mins)
3. Clamp the max change within one trade

• 5% ?

[OliverNChalk]

3. We clamp the max move in one trade