> ## Documentation Index
> Fetch the complete documentation index at: https://ruponchain.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Solvency Benchmark

> Empirical proof of LP vault insolvency prevention under a deterministic -8% weekend gap.

## The Solvency Differential

In an institutional RWA perp market, liquidity providers underwrite trader profits and absorb liquidations. When a reference market gaps over the weekend, the solvency of the liquidity vault is put to the test:

| Metric | Standard Vault (Naive 24/7) | Guarded Vault (Nyxor Engine) | Impact |
| - | - | - | - |
| **Friday Max Leverage** | 20.00x (Static) | 5.00x (Automated Ramp) | Risk scaled down before close |
| **Pre-Close Deleveraging** | None (100% exposed) | Automated at T-7.5m | Excess leverage cut at \$4,150 |
| **Monday Open Price** | \$3,818.00 (-8.00%) | \$3,818.00 (-8.00%) | Identical opening gap shock |
| **Trader Negative Equity** | -\$7,487.26 USDx | \$0.00 USDx | Margin absorbed gap cleanly |
| **Vault Bad Debt Accumulation** | **\$7,487.26 USDx** | **\$0.00 USDx** | **100% Solvency Preserved** |
| **LP Haircut Applied** | **YES (Insolvent)** | **NO (Healthy)** | LPs fully protected |

***

## Accounting Breakdown (Naive Vault Insolvency)

When Trader 1 held a 20x Long position (\$50,000 notional) across the −8.00% gap on the Naive market:

```text theme={null}
Position Size:              50,000.00 USDx (20x leverage)
Initial Trader Margin:       2,500.00 USDx
Price Decline (-8.00%):     -4,000.00 USDx
Accrued Weekend Funding:    -1,487.26 USDx
Total Losses:               -5,487.26 USDx

Trader Equity at Reopen:     2,500.00 - 5,487.26 = -2,987.26 USDx
Liquidator Execution Bounty: 1,000.00 USDx
Shortfall to Absorb:        -3,987.26 USDx

Insurance Fund Depleted:    -$40.80 USDx (100% depleted)
Net Vault Bad Debt:         $7,487.26 USDx (Dumped onto Liquidity Providers)
```

In contrast, on the **Nyxor Guarded Market**, Trader 1's position was trimmed down to 5x ($12,500 notional) at 20:52:30 UTC at the fair Friday price ($4,150.00). At Monday's −8.00% reopen, the trader's equity remained positive, requiring zero vault subsidization!


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