What happens to the economics of Yggdrasil vaults being stolen in periods of high upward volatility? If I run a node with a $1m bond, my vault will have 250k of assets. If the market is volatile, the assets in my vault could increase in value which could make theft economically profitable. It seems unlikely, but has a retrospective analysis been done to see if there has ever been a time when assets appreciate enough that such that the value of Yggdrasil vault exceeds the value of the bond? EG: if my vault a significant amounts of BTC and a blow-off-top moment is happening, I can imagine a possibility that my vault becomes more valuable than my bond for a short moment of time. How often do Yggdrasil vaults get rebalanced?
Answer provided by Son of Odin on Dev Discord of ThorChain: "If BTC goes up in value, arbs will swap rune for BTC. This will naturally drain BTC from the yggs.".
Also this (by Dennis, Mod of ThorChain Community Telegram): As the price of BTC, in this theoretical situation, were to go parabolic, you gotta remember arbitration bots would be removing BTC while adding more Rune to bring the pools in the balance. And, technically, the price of Rune would go up a bit too as TVL would Increase the value determinisitcally. So the rune Bonded would go up in value too. So for BTC to exceed the bonded amount, it would truly have to be an unprecedented, lopsided affair.
What happens to the economics of Yggdrasil vaults being stolen in periods of high upward volatility? If I run a node with a $1m bond, my vault will have 250k of assets. If the market is volatile, the assets in my vault could increase in value which could make theft economically profitable. It seems unlikely, but has a retrospective analysis been done to see if there has ever been a time when assets appreciate enough that such that the value of Yggdrasil vault exceeds the value of the bond? EG: if my vault a significant amounts of BTC and a blow-off-top moment is happening, I can imagine a possibility that my vault becomes more valuable than my bond for a short moment of time. How often do Yggdrasil vaults get rebalanced?
Answer provided by Son of Odin on Dev Discord of ThorChain: "If BTC goes up in value, arbs will swap rune for BTC. This will naturally drain BTC from the yggs.".
Also this (by Dennis, Mod of ThorChain Community Telegram): As the price of BTC, in this theoretical situation, were to go parabolic, you gotta remember arbitration bots would be removing BTC while adding more Rune to bring the pools in the balance. And, technically, the price of Rune would go up a bit too as TVL would Increase the value determinisitcally. So the rune Bonded would go up in value too. So for BTC to exceed the bonded amount, it would truly have to be an unprecedented, lopsided affair.