> For the complete documentation index, see [llms.txt](https://cryptodao-it.gitbook.io/c-dao/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cryptodao-it.gitbook.io/c-dao/2.-mechanics/price-stability/circuit-breaker.md).

# Circuit Breaker

## What Are Circuit Breakers?

Circuit breakers are emergency mechanisms that slow or pause certain activities during extreme market conditions.

Like circuit breakers in traditional stock markets, they prevent cascading failures by introducing friction during panic.

## How They Work

<details>

<summary>Process flow</summary>

```
Normal conditions
    → All systems operate normally
        ↓
Extreme condition detected
    → Circuit breaker triggers
    → Specific activities slowed/paused
    → System has time to stabilize
        ↓
Conditions normalize
    → Circuit breaker releases
    → Normal operation resumes
```

</details>

## Trigger Conditions

Circuit breakers may activate during:

| Condition              | Example                       |
| ---------------------- | ----------------------------- |
| Extreme price movement | >X% drop in short period      |
| Unusual volume         | Abnormal transaction patterns |
| System stress          | High network debt ratio       |

Specific thresholds are configured in the protocol parameters.

## What Gets Affected

When circuit breakers trigger:

| Activity           | Effect                 |
| ------------------ | ---------------------- |
| Large withdrawals  | May be delayed/slowed  |
| Bond purchases     | May be paused          |
| Certain operations | Cooldown periods apply |

Regular small transactions typically continue.

## Purpose

Circuit breakers serve to:

* **Prevent cascading liquidations** — Slows panic selling
* **Give RBS time to act** — Reserves can deploy effectively
* **Reduce manipulation** — Makes flash attacks harder
* **Allow assessment** — Time to evaluate conditions

## Difference from RBS

| RBS                            | Circuit Breakers     |
| ------------------------------ | -------------------- |
| Active intervention (buy/sell) | Passive slowdown     |
| Uses reserves                  | Uses time/friction   |
| Always monitoring              | Only during extremes |
| Maintains range                | Prevents cascade     |

They work together: Circuit breakers slow the crisis while RBS addresses it.

## Transparency

Circuit breaker status is visible:

* Current state (active/inactive)
* Trigger conditions met
* Expected release time
* Affected operations

## User Impact

If circuit breakers are active:

| If you want to... | What happens          |
| ----------------- | --------------------- |
| Stake             | Usually unaffected    |
| Unstake (small)   | Usually unaffected    |
| Unstake (large)   | May be delayed        |
| Bond              | May be paused         |
| Trade on DEX      | Unaffected (external) |

## Recovery

{% stepper %}
{% step %}

### Trigger

Circuit breakers are triggered by extreme conditions detected by the system.
{% endstep %}

{% step %}

### Active period

They remain active for a defined period while conditions are assessed.
{% endstep %}

{% step %}

### Release conditions

They release when conditions normalize or when the configured time passes.
{% endstep %}

{% step %}

### Resume

Normal operation resumes after release; circuit breakers are temporary, not permanent restrictions.
{% endstep %}
{% endstepper %}

## Configuration

Circuit breaker parameters are set by governance:

* Trigger thresholds
* Duration limits
* Affected operations
* Release conditions

Changes require multi-signature approval.

## Related

* [RBS System](broken://pages/aa76b2e1428c9d09a9886d2a6271582fc2f8d565)
* [Security Overview](broken://pages/abf91864dc499a538532fd33654676a04f353c6c)


---

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