Hyper Stability Module

The Hyper Stability Module is the stability control layer of Hypezion Finance. It monitors system-wide health in real-time and automatically adjusts operations such as issuance volume, redemption speed, and fees as needed.

This module switches the protocol's state into "modes" in response to collateral price fluctuations and market volatility, applying different parameter settings (ratios) for each mode to realize a self-stabilizing mechanism even within a no-liquidation structure.

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1. Mode Overview

Hypezion Finance always operates in one of the following three modes:

Mode	State	Primary Behavior
Normal Mode	Market stable, CR sufficiently high	Normal Mint/Redeem, minimized fees
Volatile Mode	Volatility rising, peg deviation expanding	Mint restricted, Redeem prioritized, fees increased
Halt Mode	Collateral crashes, CR falls below threshold	All Mint/Redeem temporarily suspended, SP automatic defense activated

These modes are designed to transition continuously, with each mode switch automatically executed based on on-chain defined monitoring indicators (Ratios).

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2. Key Monitoring Indicators (Ratios)

(1) Coverage Ratio (CR)

$$CR = \frac{\text{Collateral TVL}}{\text{hzUSD Supply}}$$

• Basic indicator showing system-wide collateral health.
• Issuance restricted below 100%, transitions to Volatile Mode around 90%.

(2) Buffer Ratio (BR)

$$BR = \frac{\text{Collateral TVL} - \text{hzUSD Supply}}{\text{Collateral TVL}}$$

• Indicator representing residual collateral proportion, directly linked to bullHYPE risk tolerance.
• When declining, bullHYPE issuance is restricted and shzUSD reward ratio increases.

(3) Peg Deviation (PD)

$$PD = |P_{hzUSD} - 1.00|$$

• Deviation rate showing how far hzUSD market price is from the peg ($1).
• When PD exceeds threshold, fees and caps are dynamically adjusted.

(4) Oracle Confidence (OC)

$$OC = 1 - \frac{|\text{Primary} - \text{Fallback}|}{\text{Primary}}$$

• Indicator measuring agreement between oracles.
• When OC falls below a certain value, automatically transitions to Volatile Mode and temporarily restricts new Mints.

(5) Utilization (U)

$$U = \frac{\text{hzUSD Supply}}{\text{hzUSD Cap}}$$

• Utilization rate against hzUSD issuance cap.
• If too high, fees automatically increase and Mint suppression is applied.

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3. Mode Transition Logic

Modes automatically change based on composite conditions of the above indicators.

$$\begin{aligned} &\text{if } CR > 110\% \text{ and } PD < 0.005 \Rightarrow \text{Normal Mode} \\ &\text{if } 95\% \leq CR \leq 110\% \text{ or } PD \geq 0.005 \Rightarrow \text{Volatile Mode} \\ &\text{if } CR < 95\% \text{ or } OC < 0.9 \Rightarrow \text{Halt Mode} \end{aligned}$$

Normal → Volatile

• When CR declines or peg deviation exceeds a certain level
• New Mints partially restricted, Redeem prioritized

Volatile → Halt

• When Collateral crashes and CR falls below threshold
• All issuance stopped, Stability Pool automatically activated

Halt → Normal

• When CR and OC recover and PD returns below threshold
• All operations resumed

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4. Dynamic Parameter Adjustment

In each mode, the following parameters are automatically reconfigured:

Parameter	Normal	Volatile	Halt
Mint Fee	0.1%	0.5%~1.0%	Stopped
Redeem Fee	0.1%	0.2%	Stopped
Mint Cap	100%	60~80%	0%
Oracle Trust Weight	1.0	0.7	0.3
SP Activation	Low	Medium	High (auto-trigger)

This ensures the protocol always maintains behavior that "prioritizes health over liquidity."

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5. Autonomous Stability Loop

Modes & Ratios is the core circuit for realizing system autonomy and stability.

$$\begin{aligned} &CR \downarrow \Rightarrow \text{Mint restricted \& Fee increases} \Rightarrow \text{Supply decreases} \Rightarrow CR \uparrow \\ &PD \uparrow \Rightarrow \text{Redeem promoted \& Cap adjusted} \Rightarrow \text{Price reverts} \Rightarrow PD \downarrow \end{aligned}$$

Through this feedback control, the peg is maintained without external operations.

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6. On-Chain Operation

• Monitoring logic periodically retrieves feeds from the Oracle Layer and updates ratios.
• Mode transitions are executed via automatic triggers, with all changes recorded in event logs.
• Each state change (ModeChanged, RatioUpdated) is verifiable as an open audit log.