Layer 8 — Quote Construction & Arbitrage Validation

Direct Book Quote Construction

BID = Adjusted MID − ½ × Total Spread
ASK = Adjusted MID + ½ × Total Spread

Synthetic MYR/IDR = USD/IDR ÷ USD/MYR + cross spread add-on

Every firm quote must pass all three checks before issuance. Any single failure escalates the corridor to RESTRICT.

Check	Rule	Failure Meaning
1. Internal Consistency	BID < Adjusted MID < ASK	Spread construction has a logic error; instant arb against the protocol possible
2. Synthetic vs Direct Gap	Gap between synthetic MYR-IDR (always computed) and direct oracle rate ≤ 0.30% in NORMAL, 0.50% in PROTECT. Synthetic rate is always computed for this check regardless of whether a direct feed is the pricing source.	Counterparties can buy from Ratio synthetically and sell externally at a profit
3. Triangular Loop Check	USD-IDR bid × MYR-IDR ask × (1 / USD-MYR ask) ≤ 1	Circular arb path exists; counterparty can loop USD→IDR→MYR→USD and extract risk-free profit

Control	Description
`expiry_timestamp`	Hard timestamp after which the quote cannot be executed
`max_size`	Maximum notional the quote covers
`allowed_direction`	BUY or SELL — reflects current state and inventory constraints
`state_flag`	Current system state: NORMAL, PROTECT, or RESTRICT
`tranche_id`	Populated for split orders; identifies this quote as one tranche of a larger parent
`rate_source`	MYR-IDR only. DIRECT or SYNTHETIC — always present for MYR-IDR quotes