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Removing an Illiquid Market

Understand the risk of removing an Illiquid market​

When a market starts reverting, the vault manager might be inclined to remove the market from the vault. If the Silo Vault has zero deposits in the market, removing it poses no risk. See Removing an Empty Market. However, if the Silo Vault has funds deposited and those funds cannot be withdrawn due to insufficient liquidity, removing the market will likely lead to the loss of those funds when the market is re-added to the vault.

Instead of removing a market with insufficient liquidity for withdrawal, we recommend setting its supply cap to zero and moving it to the bottom of the Withdraw Queue.

How Does the Vault Lose Funds When It Re-Adds a Removed Market?​

When SiloVault re-adds a previously removed market with existing deposits, the assets from that market are distributed unfairly (evenly across existing depositors). This creates an opportunity for attackers to frontrun the market-add transaction and steal the re-added vault's deposited liquidity. For example, an attacker could deposit 1Mintoa1M into a 9M SiloVault and immediately receive 10% of the re-added vault deposits. The attacker could then withdraw instantly, profiting from the unfair distribution.

Proceed if you accept the risk of losing the funds when you add a removed market.

1. Set cap to zero​

Go to your vault and click 'Change cap'.

Actions - Change cap

Find the corresponding market and set the cap to zero. Set market cap to zero

Click 'Confirm' (there is no time-lock for reducing caps).

2. Set market's withdrawal queue to highest priority​

Go to your vaults and click 'Withdraw Queue'.

Actions - Withdraw Queue

Move the affected market to Priority 1 (above the Idle Market).

Chnage withdraw priority

Click 'Confirm' (there is no time-lock for changes to withdraw queue).

3. Remove Markets​

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