Contract Tiers

Every perpetual market on Velocity is assigned a Contract Tier — A, B, C, Speculative, Highly Speculative, or Isolated (ContractTier, state/perp_market.rs:75-89). The tier is a single admin-set enum field (PerpMarket.contract_tier, updated via handle_update_perp_market_contract_tier, instructions/admin.rs:2247-2263) that drives a fixed set of derived risk limits: how much insurance a market can ever draw, how wide an oracle confidence band is tolerated before the oracle is treated as invalid, how tightly incoming TWAP data points are clamped, and how oracle/mark divergence is checked before settling PnL. This page tabulates those derived limits from source. For what a tier conceptually means and how it’s described in-app, see Market Specs — Contract Tier; for oracle validity mechanics generally, see Oracles; for the insurance backstop itself, see Insurance Fund.

A market’s tier assignment is a live, admin-adjustable value, not a fixed property of the asset. The roster of markets and their current tier assignments (for example, at the time of writing SOL-PERP/BTC-PERP/ETH-PERP are Tier B and HYPE-PERP is Tier C) should be read from the in-app market list or on-chain PerpMarket account, not from this page. The numbers attached to each tier below (insurance caps, confidence multipliers, TWAP bands) are the stable reference — only which market sits in which tier changes over time.

ContractTier is Ord-derived and ranked safest-to-riskiest in declaration order: A < B < C < Speculative < HighlySpeculative < Isolated (state/perp_market.rs:72-89). The default tier for a newly created market is HighlySpeculative (#[default], state/perp_market.rs:85-86) — a market must be explicitly promoted to a safer tier.

Tier reference table

Tier	Insurance fund cap	Max oracle confidence before `TooUncertain`	TWAP-update sanitization band
A	$100M (`INSURANCE_A_MAX`)	1x base → 2% of price	new data point clamped to ±10% of the running TWAP
B	$1M (`INSURANCE_B_MAX`)	1x base → 2% of price	±20% of the running TWAP
C	$100k (`INSURANCE_C_MAX`)	2x base → 4% of price	±50% of the running TWAP
Speculative	$0	10x base → 20% of price	±33% of the running TWAP (protocol default, see note below)
Highly Speculative	$0	50x base → 100% of price	±33% of the running TWAP (protocol default)
Isolated	$0	50x base → 100% of price	±33% of the running TWAP (protocol default)

Sources:

Insurance cap — INSURANCE_A_MAX / INSURANCE_B_MAX / INSURANCE_C_MAX / INSURANCE_SPECULATIVE_MAX (math/constants.rs:144-147); enforced as the ceiling on quote_max_insurance, unrealized_max_imbalance, and max_revenue_withdraw_per_period in handle_update_perp_market_max_imbalances’s tier match (instructions/admin.rs:1499-1516).
Max oracle confidence — PerpMarket::get_max_confidence_interval_multiplier (state/perp_market.rs:582-592) returns a per-tier multiplier applied to the guard rail’s base confidence threshold (ValidityGuardRails.confidence_interval_max_size, assumed 2% of price per the function’s own comment). The multiplied value is compared against the oracle’s reported confidence as a percent of price inside oracle_validity (math/oracle.rs:353-360); exceeding it raises OracleValidity::TooUncertain (math/oracle.rs:36, 52), which blocks or degrades margin calcs, fills, and liquidations depending on the action (see Oracles).
TWAP-update sanitization band — PerpMarket::get_sanitize_clamp_denominator (state/perp_market.rs:655-664) returns an explicit denominator for tiers A/B/C (10/5/2 → 10%/20%/50% of the last TWAP value) and None for Speculative/Highly Speculative/Isolated, which falls back to DEFAULT_MAX_TWAP_UPDATE_PRICE_BAND_DENOMINATOR = 3 (→ ~33%) wherever the clamp is applied (vlp/amm/math/amm.rs:193-215). This denominator bounds how far a single new oracle-TWAP data point can move the market’s running 5-minute/1-hour oracle TWAPs in one update (PerpMarket::update_oracle_derived_stats, state/perp_market.rs:601-653; consumed again in funding, controller/funding.rs:234-248, and spot balance updates, controller/spot_balance.rs:84-89).

The sanitization band is not monotonic across tiers in the source: Tier C’s explicit override (50%) is wider than the ~33% default that Speculative, Highly Speculative, and Isolated fall back to. Don’t assume “riskier tier → wider TWAP band” holds all the way down the tier list — verify against get_sanitize_clamp_denominator (state/perp_market.rs:655-664) for the exact band on a given tier.

Oracle/mark divergence for PnL settlement

Separately from the TWAP-sanitization band above, PerpMarket::is_price_divergence_ok_for_settle_pnl (state/perp_market.rs:821-883) gates whether unrealized PnL can be safely settled to/from a user’s collateral. It checks two per-tier thresholds against the 5-minute oracle TWAP: the absolute oracle-vs-TWAP divergence, and the market’s tracked oracle/mark standard deviation. Settlement is blocked if either is breached.

Tier	Max oracle/TWAP divergence	Max oracle/mark std-dev
A	50 bps	200 bps of price
B	50 bps	200 bps of price
C	100 bps	500 bps of price
Speculative	250 bps	1000 bps of price
Highly Speculative	250 bps	1000 bps of price
Isolated	250 bps	1000 bps of price

Isolated tier: account-level requirements

Unlike A/B/C/Speculative/Highly Speculative — which only change a market’s risk limits — the Isolated tier additionally constrains the user account holding the position. These checks run in validate_any_isolated_tier_requirements (math/margin.rs:649-686) and validate_spot_margin_trading (math/margin.rs:846-867):

Single perp liability. While a user holds an open liability (position or order) in an Isolated-tier market, num_perp_liabilities may not exceed 1 — the account cannot simultaneously carry a liability in any other perp market (math/margin.rs:653-658).
Cross-margin trading must be disabled. A user with is_margin_trading_enabled = true cannot hold a position in an Isolated-tier market, and vice versa — entering one requires disabling the other (math/margin.rs:660-664, 846-864, ErrorCode::IsolatedAssetTierViolation).
No non-quote spot liabilities. If the account also has a spot liability, it must be exactly one liability and it must be the market’s own quote asset in a borrow position (math/margin.rs:666-673) — a non-USDT borrow alongside an Isolated-tier position is rejected.
Reduce-only escape hatch. These three checks are only enforced for accounts that are not already in reduce-only mode (!user.is_reduce_only(), math/margin.rs:653, 677) — an account that ends up over these limits (e.g. after an admin re-tiers a market underneath it) is forced into reduce-only with respect to further risk-increasing action rather than being left in an unresolvable state.

These are the on-chain rules behind the market-specs summary that Isolated tier “requires the user account refrain / disable cross margin trading” — see Market Specs — Contract Tier.

Liquidation priority across tiers

ContractTier and AssetTier share a common safety ranking (ContractTier::is_as_safe_as / is_as_safe_as_contract / is_as_safe_as_asset, state/perp_market.rs:91-108) that is used once in the liquidation path, not for general position selection but specifically to gate LiquidatePerpPnlForDeposit (settling a market’s negative PnL against a liquidatee’s own deposits mid-liquidation):

calculate_user_safest_position_tiers (math/margin.rs:198-223) scans every open perp position and spot liability on the account and returns the single safest tier present across each (the minimum ContractTier ordinal among open perp liabilities, and the minimum AssetTier ordinal among open spot liabilities).
liquidate_perp_pnl_for_deposit (controller/liquidation.rs:3093-3096) then requires the market being settled to be at least as safe as that safest tier (contract_tier.is_as_safe_as(&safest_tier_perp_liability, &safest_tier_spot_liability)). If it isn’t — is_contract_tier_violation — this settlement path is not permitted for that market while the account still holds a safer-tier liability open.

In effect: a keeper cannot use this particular settlement action against a riskier-tier market’s negative PnL while the account still holds an open liability in a safer tier — that safer-tier liability has to be resolved through the ordinary liquidation flow first. This is the one place contract tier feeds directly into liquidation sequencing; margin requirements themselves (margin_ratio_initial / margin_ratio_maintenance, imf_factor) are configured per market independently of tier and are not derived from it in code.

No insurance backstop below Tier C

Speculative, Highly Speculative, and Isolated markets carry an insurance cap of $0 (INSURANCE_SPECULATIVE_MAX, math/constants.rs:147, reused for all three tiers in the admin match at instructions/admin.rs:1503-1508). Bad debt in these markets skips the shared insurance fund entirely and falls straight to the market’s own fee-pool clawback, then socialised loss. See Insurance Fund — Insurance coverage by contract tier for the full bankruptcy-resolution waterfall.