Circuit Breaker

At Flying Tulip, the security of user funds is the top priority. As part of this commitment to robust protection, the Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry system reinforces the PUT Options offering.

The Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry is a proactive measure to prevent a threat actor from draining user funds. A rate-limiting mechanism gives the Flying Tulip team time to respond during an incident, following industry best practices.

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Note: Most users should be unaffected by the Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry mechanism.

This page covers Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry v1 (CBv1) used in Perpetual PUTPerpetual PUTThe on-chain right attached to primary-issued FT that lets a holder: Hold (keep the FT NFT attached), Exit (Exit at par; return collateral), or Withdraw (unlock FT; invalidate the PUT; released backing capital can fund market buyback-and-burn of FT).View glossary entry (ftPUTftPUTThe token representing a specific Perpetual PUT position (one position per token). Used by contracts to manage withdrawFT (invalidate PUT) and Exit at par.View glossary entry). For Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry v2 (CBv2) used in ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry, see the Circuit Breaker v2 guide.

What is a Circuit Breaker?

Think of the Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry like the fuse box at home. If too many appliances are turned on at once, a fuse "trips" to prevent a fire. Similarly, the Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry monitors the flow of funds leaving the protocol.

If it detects a large token withdrawal over a short period of time (a pattern often associated with security attacks), it automatically limits the rate of subsequent withdrawals.

Why is it essential for you?

In the world of decentralized finance (DeFiDeFiFinancial services built on public blockchains using smart contracts rather than centralized intermediaries.View glossary entry), speed is often critical. However, instant withdrawals can be exploited by attackers to drain an entire system in seconds.

The Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entryCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry acts as a speed limit for outflows. By limiting how fast funds can leave the system, Flying Tulip ensures that:

1. Attacks are stopped early: Even in a worst-case scenario, an attacker could only take a small fraction of the funds before the door closes.
2. The team can react: It gives the security team and the community time to investigate and respond to any anomalies.
3. User principal is safer: The vast majority of the capital remains secure in the vault, protected by this rate limit.

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"It's for your security: a guarded launch that slows attackers, not users." - Storm0x, Security Researcher

CBv1 vs CBv2

• CBv1 (used in Perpetual PUTPerpetual PUTThe on-chain right attached to primary-issued FT that lets a holder: Hold (keep the FT NFT attached), Exit (Exit at par; return collateral), or Withdraw (unlock FT; invalidate the PUT; released backing capital can fund market buyback-and-burn of FT).View glossary entry): If outflow capacity is exceeded, withdrawals can revert. Users must come back and retry the withdrawal transaction when capacity is available again.
• CBv2 (used in ftUSDftUSDA delta‑neutral, yield‑bearing stable asset designed to target $1 while minimizing liquidation risk by balancing long/short exposures (e.g., supply/stake/borrow loops).View glossary entry): If outflow capacity is exceeded, the withdrawal is queued instead of rejected. The withdrawal does not need to be re-submitted by the user, it becomes claimable after the delay (currently ~6 hours).
• Claim step in CBv2: After the delay expires, anyone can execute the queued payout to send tokens to the user's wallet. If no relayer/automation executes it, the user returns and claims manually.
• Key behavior difference: In CBv1, outflows can be fully blocked at the time of request. In CBv2, outflows proceed via delayed settlement so funds are not permanently locked by a revert path.

For integration and operational details, see the Circuit Breaker v2 guide.

How does it affect user transactions?

Most users will not notice the Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry is in place.

• Deposits: Always fully operational.
• Normal Withdrawals: The system is configured to handle standard withdrawal volumes easily.
• High Traffic: If there is a sudden "rush" for the exitexitAction that exercises the Perpetual PUT at par; the original asset/amount is returned.View glossary entry (unlikely in normal operations), withdrawals may take longer (e.g., a few hours) while outflow capacity replenishes.

The Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry only limits outflows. Exits flow through the wrapper and withdrawals are subject to the same outflow checks. Deposits are tracked for safety monitoring but are never rate-limited.

The "Fail-Open" guarantee

The system is designed with a "Fail-Open" philosophy. This means that if the Circuit BreakerCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entryCircuit BreakerA rate‑limiting safety mechanism that throttles withdrawals or outflows to reduce exploit blast radius.View glossary entry itself were to malfunction or break, it would default to allowing transactions. Users never have to worry about their tokens being locked permanently by an issue in the safety system.

Transparency

Being open about the system's status is essential to Flying Tulip. A dedicated Status Page will allow users to see the current health of the system in real-time, including:

• Current withdrawal capacity.
• Any active rate limits.
• Estimated recovery times if usage is high.