Tiered Threshold System
1. Three-Tier Design
The single binary threshold is replaced with three tiers per Reserve Pool per corridor. Each tier has a different behaviour, reflecting the escalating urgency of the position.
| Tier | Trigger Condition | Behaviour | Rationale |
|---|---|---|---|
| Below Soft | Deviation < Soft Threshold | No action. Natural flow via Phase 1 is handling it. | Position is small enough that reverse flow will likely correct it without intervention. |
| Soft Zone | Soft ≤ Deviation < Hard | Start cooldown timer. Phase 2 fires ONLY if position is still in Soft Zone or above when timer expires. | Give reverse flow a chance to reduce the position. Most bilateral flow corridors will see partial or full offset within the cooldown window. |
| Hard Zone | Hard ≤ Deviation < Emergency | Phase 2 fires immediately. No cooldown. | Position is too large to wait. Risk of further adverse movement exceeds the potential benefit of waiting for offset. |
| Emergency | Deviation ≥ Emergency Threshold OR VaR > 80% | Emergency RFQ (Reserve Pool VaR). Immediate aggressive clearance. | Critical risk level. All smart trigger logic bypassed. Emergency RFQ protocol takes over. |
Below Soft, you do nothing. Above Hard, you act immediately. The Soft Zone is the range where waiting has the highest expected value — the position is meaningful but not dangerous, and reverse flow is likely within the cooldown period.
The width of the Soft Zone (Hard minus Soft) and the length of the cooldown are the two primary tuning parameters. Wider Soft Zone + longer cooldown = more patience = higher COGS savings but higher interim risk. Narrower Soft Zone + shorter cooldown = less patience = lower savings but lower risk.
2. Per-Pool Threshold Configuration
Thresholds are set per Reserve Pool (per stablecoin) per corridor. This allows different calibration for the USDT side vs the local stablecoin side, reflecting that USDT is more liquid and less volatile to hold.
| Pool | Corridor | Soft | Hard | Emergency | Unit |
|---|---|---|---|---|---|
| USDT | USD-IDR | $50K | $100K | $150K | USD |
| IDRX | USD-IDR | $50K eq | $100K eq | $150K eq | USD equiv |
| USDT | USD-SGD | $100K | $200K | $300K | USD |
| tnSGD | USD-SGD | $100K eq | $200K eq | $300K eq | USD equiv |
| MYRC | MYR-IDR | $30K eq | $60K eq | $90K eq | USD equiv |
| IDRX | MYR-IDR | $30K eq | $60K eq | $90K eq | USD equiv |
3. Complete Decision Flow
The following sequence executes every time a Phase 1 settlement updates the Reserve Pool balance for any stablecoin pool:
| Step | Check | Action |
|---|---|---|
| 1 | Calculate Reserve Pool deviation from target | Deviation = |Current_Balance − Target_Balance| in USD equivalent |
| 2 | Check Emergency condition | If Deviation ≥ Emergency Threshold OR VaR > 80%: cancel any active cooldown; trigger Emergency RFQ; STOP |
| 3 | Check State Engine | If State = RESTRICT or HALT: cancel any active cooldown; trigger Phase 2 immediately; STOP |
| 4 | Check Hard Threshold | If Deviation ≥ Hard Threshold: cancel any active cooldown; trigger Phase 2 immediately with Rebalance_Amount calculation; STOP |
| 5 | Check Soft Threshold | If Deviation ≥ Soft Threshold AND no cooldown active: start cooldown timer (duration based on time-of-day profile); CONTINUE monitoring |
| 6 | Check Soft Threshold (cooldown active) | If Deviation < Soft Threshold during cooldown: cancel timer; log "Cooldown Saved"; return to IDLE |
| 7 | Cooldown expiry | If timer expires AND Deviation still ≥ Soft Threshold: trigger Phase 2 with Rebalance_Amount; return to IDLE after execution |
| 8 | Below Soft Threshold (no cooldown) | No action. Natural flow handling position. |
Priority of Checks
The checks are evaluated in strict priority order: Emergency > State Override > Hard > Soft > IDLE. A higher-priority condition always overrides a lower-priority one. For example, if a cooldown is active (Soft Zone) and VaR crosses 80%, the cooldown is immediately cancelled and Emergency RFQ fires.