# Open Interest Balancing

<figure><img src="/files/YDH9nFhUy4nlweaROima" alt=""><figcaption></figcaption></figure>

Open interest (OI) can skew heavily to one side during narrative-driven moves. Left unchecked, this concentrates risk in the unified stablecoin vault and distorts user economics. BasePerp applies bounded, transparent incentives to nudge positioning back toward balance—only when and where it’s justified by data.

### 6.1 Skew Metric

We use a simple, auditable ratio so decisions remain deterministic: skew = |OI\_long − OI\_short| / (OI\_long + OI\_short).\
Markets define band edges (e.g., <10%, 10–25%, 25–50%, ≥50%) and per-band budgets via timelock; bands can be widened or narrowed as liquidity conditions change.

### 6.2 Incentive Palette

Programs are minimal by default and escalate only if skew persists. Loss rebates compensate a portion of realized loss on the under-represented side; fee discounts reduce the effective profitFeeRate on profitable closes; non-monetary boosts (XP/points) recognize real participation without adding balance-sheet risk. Each lever has ceilings and a global counterSkewCap so incentives cannot spiral.

### 6.3 Calculation & Settlement

We snapshot everything at entry and settle cleanly on close—no retroactive surprises.

1. **Entry snapshot**. The active band, local caps, and discount coefficients are fixed the moment the position opens.
2. **Close logic**. Realized PnL is computed; any qualifying loss rebate or fee discount is applied; final fees are calculated.
3. **Budget discipline**. Each epoch uses a decaying schedule near exhaustion, smoothing incentives instead of dropping off a cliff.

### 6.4 Abuse Resistance

Abuse controls protect budgets so they reward genuine risk transfer rather than wash activity. Caps limit per-account benefit within an epoch and require a minimum holding time. Heuristics watch velocity, symmetry, and correlation; they also curb referral stacking. Cooldowns slow rapid flip-flops. When patterns look abnormal, ex-post review can disqualify offending accounts and void unearned perks.

### 6.5 Transparency & Limits

Dashboards show live OI/skew, the active band, remaining budget, and consumption pace so users and operators see the same state. During oracle incidents or extreme volatility, governance can temporarily tighten bands or disable programs. After each epoch, a short report summarizes spend, measured impact on skew, and proposed parameters for the next period.

<br>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://baseperp.gitbook.io/baseperp-whitepaper/technical-architecture/open-interest-balancing.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.