Epoch Mechanics
As discussed in the epoch timeline section, the epoch is a series of operations which occur on a 7-day schedule. These operations are handled by an authorized keeper account, and enable actions such as purchasing options, withdrawals, fee collection, etc. The epoch can be broken down into three operations, auction initialization, epoch initialization, auction processing.

On Thursday at approximately 8am UTC the keeper calls
initializeAuction
:- 1.the option expiry timestamp, long and short token ids, and strike price are set, strike price is calculated using the delta strike formula
- 2.the auction start and end times are set
- 3.
Vault
callsinitialize
onAuction
On Friday at approximately 8am UTC the keeper calls
initializeEpoch
. It is assumed if the vault previously underwrote an option, it will already have been expired and processed prior:- 1.if the epoch id is greater than 0,
Vault
will remove reserved liquidity from the Premia pool - 2.if the epoch id is greater than 0 and
Vault
earns a positive net income a performance fee is calculated and transferred to the fee recipient account. - 3.
Vault
callsprocessDeposits
onQueue
, transferring all of the collateral held inQueue
toVault
. In exchange for the deposited collateral,Vault
will mint and transfer vault shares toQueue
. - 4.the option max/min prices are calculated and set for the next auction
- 5.the epoch id is incremented
Once the epoch is initialization process completes there will be an 8 hour gap before the auction begins.
On Friday at approximately 4:30pm UTC or when the auction has been finialized the keeper will call
processAuction
:- 1.
Vault
stores the total assets held inVault
, this value represents the amount of assets held before premiums are sent toVault
. - 2.if the auction has not been finalized,
Vault
finializes it - 3.
Auction
transfers the premiums earned during the auction toVault
- 4.
Vault
underwrites the options sold during the auction via Premia's option pool, the long token is sent toAuction
and the short tokens is sent toVault
- 5.
Vault
sets the divestment timestamp to prevent the collateral from entering the "free liquidity queue" upon exercise or expiration - 6.
Vault
processes the auction, after 24 hours the option buyers may withdraw their long tokens fromAuction
- 7.
Vault
removes the withdrawal lock, users may withdraw or redeem fromVault
Last modified 9mo ago