Market safeguards

A perpetual market rests on a few moving parts. The index price has to keep arriving. Funding has to stay within what a market and its reference can produce. A liquidation that costs more than its margin has to be absorbed before it reaches anyone else. Quanta watches each of these continuously and has a defined response ready for every one of them, so the market behaves the same way in its busiest minute as it does on a quiet day.

How a market opens

When an index clears the data bar (The index family) and gets a market, as PKMN has, Quanta does not switch everything on at once. A new market opens with limit orders only. You post a bid or an offer at a price you choose. Market orders wait, because a market order fills against whatever sits on the book, and a fresh book is still filling in. Limit-only opening protects your fill the way the mark price band protects the mark (Index price, mark price, last price): every early trade happens at a price somebody wrote down in advance.

Market orders switch on once liquidity is proven continuous on both sides. Each word matters. Both sides, because a book with bids and no offers is a queue rather than a market. Continuous, because liquidity that appears on day one and leaves an hour later says nothing about the market you will trade next week. The depth that counts as enough, and how long it has to hold, are part of each market's published parameters.

From there a market moves between a small set of states: limit orders only, open to market orders, and reduce-only whenever a health condition fails. In every one of them, a closing order is accepted.

Three conditions, watched around the clock

Once a market is open, three conditions are monitored continuously. Each one covers a known failure mode of perpetual venues, and each is something Quanta acts on directly the moment it changes.

Condition	What it checks	What it protects
Price feed fresh	The index price arrives from Quanta's oracle at its expected cadence	Positions are always valued against a current index level
Funding within bounds	Funding stays inside the range a market and its reference can honestly produce	The book stays attached to the index, and any drift is caught at once
Insurance fund above requirement	The market's insurance fund covers what its open positions could cost it	The market only carries risk it can pay for

Feed freshness is the simplest condition and the most important. The oracle publishes the index at least once per second, and the matching engine expects it at that cadence, so a position is never priced against an old number.

Funding is the earliest signal. It is sized by the gap between the market and the index (Funding). When that gap grows past what the band and the book should allow, the market treats it as a signal that something upstream needs attention and responds to it, rather than leaving it open as a trade.

The insurance fund is the backstop for everyone. Each market has a dedicated insurance fund, funded by Quanta before the market opens, which absorbs losses beyond a liquidated position's margin before they can reach anyone else. Auto-deleveraging, scoped to that one market, stands behind it (Margin, leverage and liquidation). Above requirement means the fund can cover what the open positions could plausibly cost, so the market never takes on more than it can stand behind.

Reduce-only

If any of the three conditions fails, the market goes reduce-only. The rule is deliberately narrow. An order that reduces an existing position is accepted. An order that would open a new position, or make an existing one larger, is declined. You can close, take a profit, cut a loss, or bring a large position down to a size you are comfortable holding. Only adding is paused.

Reduce-only is not a halt. A halt freezes everyone, including the trader who spotted the problem and wants out. Reduce-only closes the entrance and keeps the exit open: a closing order is always accepted. No rule ever holds you in a Quanta market because a feed paused or a fund dipped below its requirement. The market simply stops taking on new risk until the condition is healthy again, and then reopens fully.

The oracle behind the feed

The oracle is built so the feed stays fresh and never goes silently wrong. The index price comes from redundant publishers rather than a single process. Guardrails take the median across sources, so one publisher reporting a wrong value cannot move the number the engine sees. The engine also watches for silence: a feed that stops arriving fresh pauses new risk instead of passing off an old value as current. The number the mark price is clamped to is always the live Quanta index.

What the market shows you

A safeguard you can see is one you do not have to take on faith, so a Quanta market puts its state in front of you. The market page shows who lists it. Each market publishes its parameters: the band factor, the funding interval and caps, the margin requirements, the fee schedule (Fees) and the liquidity conditions for enabling market orders. A status page shows the current state of each market (limit-only, open or reduce-only) next to its three health conditions, so you never have to work out what the market is doing from how your orders behave.

Together these keep every Quanta market clear about its own state and keep the way out open at all times.