> For the complete documentation index, see [llms.txt](https://docs.vigilan.market/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.vigilan.market/hedging/market-types-and-risk-scenarios.md).

# Market Types and Risk Scenarios

Vigilan organizes hedging around the risk affecting a position. The following are risk scenarios and possible contract designs, not a list of markets guaranteed to be open. Consult the app for live inventory.

| Risk family                   | Example question or condition                                                        | Exposure it may help address                     |
| ----------------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------------ |
| Price decline                 | Does a specified price fall below a defined threshold during the window?             | Downside exposure in a held asset                |
| Range break                   | Does a price spend a defined share of an observation window outside a band?          | LP range exposure and interrupted fee generation |
| Funding stress                | Does a specified funding rate exceed a threshold under a defined measurement method? | Perpetual funding costs                          |
| Peg deviation                 | Does a stablecoin or staked asset deviate from a specified reference?                | Relative-value exposure in pegged assets         |
| Protocol incident             | Does a specified exploit or unauthorized loss meet the stated criteria?              | Exposure to a protocol or application            |
| Network or service disruption | Does an identified chain or service suffer a qualifying interruption?                | Loss of access or operational availability       |
| Listing or other catalyst     | Does a defined announcement or event occur by the deadline?                          | Exposure to a particular catalyst                |

#### Range breaks and LP losses

A range-break contract measures its stated price condition. It does not directly measure every LP's impermanent loss, fee income, or total portfolio return.

For example, a market asking whether price spends at least 10% of a day outside a ±3% band differs from a market asking whether price touches that band once. Both differ from a contract measuring an individual LP position's loss.

The sampling interval, reference price, threshold inclusivity, and treatment of missing observations determine the result. A range-break payout may offset part of an LP loss without matching it exactly.

#### Funding stress

A funding-rate threshold is different from cumulative funding paid. A venue's displayed estimated rate can also differ from its finalized funding rate.

Match the exchange, contract, funding interval, observation method, and position direction. A contract using one venue's rate may be a poor hedge for a position on another venue.

#### Peg deviation

A token's price against USDT is not necessarily the same as its price against USD. For a staked asset, a reference may use a market ratio or a protocol exchange rate. Use the reference defined in the contract.

#### Traditional financial exposure

The broader direction includes risks relevant to stock, ETF, and brokerage users. Potential future designs could address price gaps, event-driven moves, or other objectively measurable financial conditions.

These are expansion examples, not an announcement that such markets are live. Any future market will require its own instrument definition, trading calendar, source, and resolution rules. A contract on a tokenized stock and one on the underlying exchange-listed stock are not automatically interchangeable.


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