# Bot Policy (What It Actually Does)

## Inputs (per pool)

- **Oracle price** `P_oracle(T)` — target peg: 1.00 for USD stables; FX for EUR tokens
- **Pool mid price** `P_pool(T)`
- **Deviation**: `δ = (P_pool - P_oracle) / P_oracle`
- **Inventory imbalance** on cW side (how much of your token remains vs baseline)
- Public chain liquidity/volatility conditions
- Bridge backlog / mint-burn queue status (if available)

## Actions

### 1. Tight-peg maintenance trades

- If `P_pool(T) > P_oracle + band` → bot **sells** `T` into pool (adds T inventory / absorbs quote)
- If `P_pool(T) < P_oracle - band` → bot **buys** `T` from pool (removes T inventory / spends quote)

### 2. Inventory re-centering

- If pool is “too drained” of T (or too full), bot adjusts by:
  - Adding/removing single-sided liquidity on T side
  - Optionally bridging more T from ChainID 138 or redeeming back

### 3. Cross-pool routing

When multiple quotes exist (USDT/USDC/DAI), the bot routes to the best edge:

- Trade where slippage + fee is lowest
- Optionally rebalance quote asset via existing DEX routes (USDC ↔ USDT ↔ DAI)

### 4. Bridge-aware throttling

- If the bridge is congested or risk flags trip, bot widens bands / reduces exposure

### 5. Gas-budgeted micro-support lane

For selected wrapped USD rails, especially **cWUSDC** and **cWUSDT**, you can reserve a small gas budget for **micro-trades** against **USDC** / **USDT**:

- Prefer matched-quote rails when they exist: `cWUSDC/USDC`, `cWUSDT/USDT`
- Keep each trade tiny relative to `I_T^*`
- Use inventory-aware direction first: sell cW into the pool when inventory is too low; buy cW from the pool when inventory is too high
- If the pool is already near its inventory target, alternate tiny buys/sells only within a separate gas budget

Purpose:

- Give wrappers **observable turnover**
- Tighten route discovery and quote confidence
- Keep the support lane small enough that the PMM remains a **corridor defense tool**, not the primary venue

Important: this improves **tradability and price discovery**, but it does **not** create backing or intrinsic value by itself.

## Peg bands

See [../config/peg-bands.json](../config/peg-bands.json) and [05-oracles.md](05-oracles.md). Summary:

- **USD-pegged**: Normal ±10–25 bps; stress ±50–150 bps; circuit break >2%
- **EUR-pegged**: Normal ±25–50 bps; stress ±100–250 bps; anchor via EURUSD oracle

State machine and pseudo-code: [../spec/bot-state-machine.md](../spec/bot-state-machine.md), [../spec/bot-pseudo-code.md](../spec/bot-pseudo-code.md).