Trading
Black Swan
Global settlement, individual settlement modes, and collateral bidding revival
Black Swan & Global Settlement
A black swan occurs when the least-collateralised CDP becomes undercollateralised — its collateral value falls below the value of its debt at the current feed price. The asset issuer configures the response method via black_swan_response_method:
| Response Method | Behaviour |
|---|---|
| global_settlement | All CDPs settled at the current feed price simultaneously. Asset frozen until revived via collateral bidding. |
| no_settlement | Black swan acknowledged but asset continues trading. Undercollateralised position handled individually. |
| individual_settlement_to_fund | Only the undercollateralised position is settled into a fund. All other positions continue normally. |
| individual_settlement_to_order | Undercollateralised position converted into a limit order on the DEX. Other positions unaffected. |
After global settlement, collateral from all settled positions is pooled in a settlement fund and the asset is frozen. Any account may bid via bid_collateral_operation to take over a portion of the debt and corresponding collateral, competing by offering higher collateral ratios. When sufficient well-collateralised bids exist, the protocol revives the asset and restores normal trading.