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Safebox
Thales utilizes AMM’s to facilitate several products, including single asset UP/DOWN markets and Ranged Markets, and while this system works well, there is always the risk of a major market event that puts the AMM’s liquidity at risk.
To mitigate this risk, Thales has implemented a β€œSafebox” strategy where a small percentage of the fees collected from positional token AMM trades, Exotic Markets positions, and other Thales products will be stored in a separate contract to be used as a safeguard against potentially detrimental market developments.
The following TIPs, as well as other TIPs that are currently in progress, have been submitted and reviewed by the community to establish this safebox strategy:
You can view the Safebox Contracts here:

Safebox Fees

The following fees are collected from different Thales Market products:

Positional Tokens (see TIP-19)

​TIP-19 proposed a way for the AMM to mitigate risk by introducing a SafeBox fee pool which will collect 1% of sUSD value from each trade to act as a backstop in the event of AMM insolvency. The SafeBox will be shared among other Thales products, such as Thales Royale and Exotic Markets, and will be used to incentivize stakers once collected fees reach a point that it is economically viable to justify gas costs.
To facilitate these fees, the minimum spread is reduced from 1% to 2% so traders do not see any increase in prices.
​TIP-44 increases the SafeBox fee to 2%.
​TIP-87 increases the SafeBox fee to 3%.

Exotic Markets

Each bid on an Exotic Market position will be subject to a total fee of 3%, with 1% going to the safebox (if the market is not cancelled). Withdrawals (if allowed by market creator) will be subject to a 6% total fee, with 3% going to the safebox.
Fees from market disputes, based on Oracle Council review:
  • If the OC accepts a dispute and sets a result, then the resolver fee (1% for each bid) will go to the safebox.
  • If the OC accepts a dispute and resets the market result, 10 sUSD will be sent to the safebox.
  • If the OC refuses a dispute, then the 100 sUSD bond put up by the unsuccessful disputer will go to the safebox.
Fees from market resolution, based on Oracle Council review:
  • If the OC accept a dispute and sets a result, then the resolver fee (1% for each bid) will go to the safebox.
  • If the OC accepts a dispute and resets the market result, then 10 sUSD will go to the safebox.
  • If the OC refuses a dispute, then the disputer's 100 sUSD bond will go to the safebox.

Uses for Safebox funds

The funds collected in the Safebox contract are controlled by the Thales Council. While these funds are used to secure AMM from insolvency, once the contract contains a certain threshold, these funds will be used to benefit stakers.
Current strategy for Safebox funds:
  • Buy Back and Burn (see TIP-50, implemented 5/30/22): Tip 50 calls for the use of fees collected in the SafeBox contract to begin the buyback and burn program for THALES tokens. At the time of writing the TIP, the SafeBox was holding about 22k of sUSD on both Optimism and Polygon. TIP-50 also calls for the Thales Treasury DAO to move 20k of the 100k sUSD in profits captured by the AMM to the Safebox contract. TIP 50 proposes that buying and burning THALES at current prices will provide more benefit to stakers than simply returning sUSD to them. The initial proposal is to spend 300 sUSD per 24hr At time of implementation, 1100 THALES was burned daily, allowing the program to operate for 150 days.
  • ​TIP-59 increases the buyback frequency from every 24 hours to every 18 hours.
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Safebox Fees
Uses for Safebox funds