Expiry and settlement
Which rate counts
The rate observed at or shortly after expiry: the first agreed rate submitted once the contract has expired. With the oracle job running every 5 minutes and rates refreshed every few minutes, that is normally the rate within about 10 minutes after expiry.
Rates before expiry never count, however far they moved.
How a contract settles
- The contract reaches its expiry.
- Oracle operators submit rates, and the oracle agrees a rate (see Validation and aggregation).
- Settlement runs. Anyone may trigger it once a rate is agreed; the protocol's oracle job does it automatically. Nobody can supply a rate at this step: the contract reads only the agreed rate.
- The payout is calculated (see Payout calculation).
- The payout is charged to the contract's backers in proportion to their reserves, and the rest of their reserves returns to their free money.
- The contract is marked settled, and the business can receive any payout.
Steps 3 to 6 happen in one transaction.
Timing
| Event | Typically |
|---|---|
| Expiry | The time of purchase plus the tenor, to the second |
| Rate agreed | Within about 10 minutes after expiry |
| Settled | In the same or the next oracle run |
| Payout available | As soon as settled; no deadline to receive it |