Circuit Breaker & Mint Status

⚠️ REQUIRES AKASH CORE TEAM MEMBER

Circuit breaker testing requires manipulation of the oracle price feed, which can only be done by an Akash core team member with access to the testnet price feeder infrastructure.

Background - Circuit Breaker Mechanics:

The Collateralization Ratio determines system health. It measures whether the vault has enough AKT to back all outstanding ACT:

Collateralization Ratio = (VaultAKT × OraclePrice) / OutstandingACT

Where:

• VaultAKT = AKT held in vault (backing)
• OraclePrice = Current AKT/USD price from oracle
• OutstandingACT = Total ACT in circulation (each ACT ≈ $1 USD)

When AKT price drops dramatically, the vault’s USD value drops below the outstanding ACT liability, triggering the circuit breaker.

Current Testnet State Example:

VaultAKT: 205 AKT
OutstandingACT: 95 ACT (~$95 USD)
Current Price: $0.46
Current CR = (205 × $0.46) / 95 = $94.30 / $95 ≈ 0.99 (99%)

Threshold Trigger Prices (based on current testnet state):

Recommended test price: $0.20 → CR ≈ 0.43 (43%) - clearly in halt territory

Circuit Breaker Testing Phases

Phase 1: Stop Production Price Feeder

When the legitimate price feeder is stopped:

systemctl stop akash-price-feeder

Expected behavior:

• Oracle stops receiving new prices
• After staleness threshold, system enters mint_status_halt_oracle
• This is different from mint_status_halt_cr

Verification:

akash query bme status
# Expected: status: mint_status_halt_oracle, mints_allowed: false

Phase 2: Start Circuit Breaker Simulator (Recovery)

The simulator initially submits real prices to recover from oracle halt:

Expected behavior:

• Oracle receives fresh prices
• Status transitions: mint_status_halt_oracle → mint_status_healthy
• Mints become allowed again
• System runs healthy for verification window (~3 minutes)

Verification:

akash query bme status
# Expected: status: mint_status_healthy, mints_allowed: true

akash tx bme mint-act 1000000uakt --from test-account -y
# Expected: SUCCESS

Phase 3: Circuit Breaker Active (Price Manipulation)

The simulator submits manipulated low price (e.g., $0.20):

Verification during circuit breaker:

# Status shows halt
akash query bme status
# Expected: status: mint_status_halt_cr, mints_allowed: false, refunds_allowed: true

# Minting FAILS
akash tx bme mint-act 1000000uakt --from test-account -y
# Expected: ERROR - circuit breaker active

# Burning WORKS (if user has ACT)
akash tx bme burn-act 100000uact --from test-account -y
# Expected: SUCCESS

# Deployment with existing ACT WORKS
akash tx deployment create deploy.yml --deposit 1000000uact --from test-account -y
# Expected: SUCCESS

# Existing deployments continue
akash query deployment list --owner <address>
# Expected: state: active

Phase 4: Recovery (Real Prices Restored)

The simulator returns to real prices (or is stopped and production feeder restarted):

Expected behavior:

• Collateralization Ratio recalculates to healthy level
• Status transitions: mint_status_halt_cr → mint_status_warning → mint_status_healthy
• Mints become allowed again
• No lasting damage to vault state

Verification:

akash query bme status
# Expected: status: mint_status_healthy, mints_allowed: true

akash tx bme mint-act 1000000uakt --from test-account -y
# Expected: SUCCESS

akash query bme vault-state
# Expected: consistent values, no corruption

Circuit Breaker Simulator Script

The simulator script runs through these phases automatically:

1. Recovery Phase (3 minutes): Submit real Pyth prices
2. Circuit Breaker Phase (30 minutes): Submit manipulated prices ($0.20)
3. Recovery Phase (5 minutes): Return to real prices, verify recovery
4. Shutdown: Log completion

Safety features:

• Refuses to run on mainnet chain IDs
• Auto-recovery after timeout (doesn’t leave system in broken state)
• Clear logging of current phase
• Graceful shutdown handling

Test 6.1: Observe MintStatusHealthy

Objective: Verify healthy status during normal operation

User Actions:

1. Ensure Collateralization Ratio is above warning threshold
2. Query mint status:

   akash query bme status

3. Perform normal operations (mint-act, create deployment)

Expected Results:

• MintStatus: mint_status_healthy
• All operations proceed normally
• epoch_blocks at minimum value

Test 6.2: Observe MintStatusWarning

Objective: Verify warning status when Collateralization Ratio approaches threshold

Precondition: Akash core team member adjusts oracle price to trigger warning state

User Actions:

1. Query current status:

   akash query bme status

2. [Akash Core Team] Adjust oracle price until Collateralization Ratio between warn and halt thresholds
3. Query mint status again
4. Attempt to mint ACT and create new deployment

Expected Results:

• MintStatus: mint_status_warning
• New mints and deployments still allowed
• epoch_blocks increases (settlements slow down)

Test 6.3: MintStatusHaltCR - New Mints Blocked

Objective: Verify new AKT→ACT conversions blocked when Collateralization Ratio below halt threshold

Precondition: Akash core team member triggers circuit breaker

User Actions:

1. [Akash Core Team] Adjust oracle price until Collateralization Ratio < halt threshold
2. Query mint status:

   akash query bme status

3. Attempt to mint ACT:

   akash tx bme mint-act 1000000uakt --from test-account -y

4. Observe failure

Expected Results:

• MintStatus: mint_status_halt_cr
• Mint-act transaction fails
• Error indicates circuit breaker active

Test 6.4: MintStatusHaltOracle - Oracle Failure

Objective: Verify system halts when oracle unavailable (separate from Collateralization Ratio halt)

Precondition: Akash core team member stops price feeder entirely

User Actions:

1. [Akash Core Team] Stop oracle price feeder completely (no price updates)
2. Wait for oracle staleness threshold
3. Query mint status:

   akash query bme status

4. Attempt operations

Expected Results:

• MintStatus: mint_status_halt_oracle
• Operations fail with oracle error
• Distinct from mint_status_halt_cr

Test 6.5: Existing Deployments Continue During Halt

Objective: Verify running deployments unaffected by circuit breaker

User Actions:

1. Create deployment while system is healthy
2. Confirm deployment running and provider bidding
3. [Akash Core Team] Trigger circuit breaker (HaltCR)
4. Verify existing deployment continues running
5. Verify provider still receives ACT settlement payments
6. Monitor for multiple settlement epochs

Expected Results:

• Existing deployments unaffected
• Providers continue receiving ACT payments
• Only new ACT minting (AKT→ACT) is blocked
• Existing ACT can still be used for deployments
• Provider burn-act still works

Test 6.6: Circuit Breaker Recovery

Objective: Verify system resumes when Collateralization Ratio recovers

User Actions:

1. Start with circuit breaker in HaltCR state
2. Confirm new mint-act fails
3. [Akash Core Team] Restore legitimate price feeder
4. Wait for price to update and Collateralization Ratio to recover
5. Query mint status
6. Attempt to mint ACT

Expected Results:

• MintStatus transitions: mint_status_halt_cr → mint_status_warning or mint_status_healthy
• New mints allowed again
• No manual intervention required beyond restoring price feed

Test 6.7: Mint Status State Transitions

Objective: Verify all valid state transitions

Test Matrix:

User Actions:

• Coordinate with Akash core team to walk through each transition
• Query status after each change
• Verify state transitions are logged/emitted