Safety Bounds & Parameters

Reference: Signals CLMSR Whitepaper v1.0 -- §7-§11, Appendix B

This section documents the guardrails that keep Signals predictable. Operators can use it as a checklist when configuring new markets; auditors can map each constant to its on-chain definition to confirm that the implementation enforces the theory.

Maker loss remains bounded

The CLMSR maker's worst-case loss is

$$\text{Loss}_{\max} = \alpha \ln(n)$$

where $\alpha$ is the liquidity parameter and $n$ the number of bins. Narrower tick spacing increases $n$ and therefore the bound, so operators should size $\alpha$ according to their tolerance: choose alpha = Loss_target / ln(n) to align the model with the treasury budget. Because the loss formula depends only on $\alpha$ and $n$, you can predict the bound before deploying a market.

Guards inside the lazy segment tree

Lazy multiplication works because a set of conservative constants keeps exponentials tame:

Constant	Purpose	Value
MAX_EXP_INPUT_WAD	Maximum exponent input per chunk	1.0e18
MIN_FACTOR	Smallest multiplier allowed per update	0.01e18
MAX_FACTOR	Largest multiplier allowed per update	100e18
FLUSH_THRESHOLD	Pending factor threshold that triggers a flush	1e21
MAX_TICK_COUNT	Maximum number of bins supported	1,000,000
MAX_CHUNKS_PER_TX	Upper bound on exponential chunks per call	1,000

LazyMulSegmentTree.sol enforces the same limits as the whitepaper. Attempts to exceed these numbers revert with explicit errors such as CE.InvalidFactor or CE.BinCountExceedsLimit, making failures easy to diagnose.

Discipline around settlement

• settleMarket only executes after block.timestamp reaches the configured settlementTimestamp (or endTimestamp when no override exists).
• Submitted settlement values are clamped into [minTick, maxTick], protecting the pool from outlier prints.
• Settlement emits per-position results deterministically, keeping gas bounded even when thousands of ranges remain open.

Implementation status

Item	Whitepaper	Contracts
Constants above	Normative	✅ Matches (LazyMulSegmentTree.sol, CLMSRMarketCore.sol)
Claim expiry	Not specified	No expiry (old guidance referencing “90 days” has been removed)
Timelock / multisig	Out of scope	Core stays Ownable; governance wrappers will be documented separately

If new governance controls or oracle sources are added, they will appear as extensions layered on top of this base spec. The CLMSR mechanism itself--loss bounds, chunking limits, rounding rules--remains unchanged.