2021/2/21 BTC Flash Crash

At 6:45 am on 2021/2/21 (UTC+8), there was a price crash on the BTC perpetual market on Perpetual Protocol. The BTC price dropped from 56,000 USDC to a low of 37,000 USDC. The price recovered after about an hour. Flash crashes are a common risk in leveraged trading. Centralized exchanges like Bitmex and Binance have developed ways to mitigate the effects, keeping crashes to a much more limited scale. While many of the techniques used by CEXs cannot be applied in the context of an AMM-based DEX, below we outline some of the measures we plan to roll out.