# Circuit Breakers and Pauses

> Spout pauses specific actions automatically when conditions call for it, and can pause them manually in an emergency.

Canonical: https://spout.finance/docs/circuit-breakers/

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Spout pauses specific actions automatically when conditions call for it, and can pause them manually in an emergency. Emergency shutdown does not block repaying.

## Automatic breakers

| Breaker | Trigger | What pauses | Ends when |
| --- | --- | --- | --- |
| Utilization cap | Loans would exceed 85% of the lending pool | New borrowing | Repayments or deposits bring utilization back under 85% |
| Junior minimum | Junior below 12% of the pool while the pool's yield rate is above Senior's 7% | New Senior deposits; Junior withdrawals that would go lower | Junior grows back above 12%, or the pool's yield rate falls to Senior's 7% or below |
| Cash reserve | A Junior withdrawal would take available cash below 15% of the pool | That Junior withdrawal | Cash rises again |
| Recent bad debt | A bad debt event in the last 30 days has not been made good | Junior withdrawals | The loss is made good or 30 days pass |
| Liquidation in progress | A liquidation is being settled | Lender deposits and withdrawals | The liquidation settles |
| Stale price | An asset's price is older than its freshness limit | Borrowing, collateral withdrawals and liquidations on that asset | A fresh price arrives |
| Cycle halt | A step in an options cycle does not reconcile | That asset's cycle, with its collateral kept locked | A person reviews and resolves it |

## Manual controls

| Control | Who can use it | What it pauses |
| --- | --- | --- |
| Asset pause | Operations | New deposits and borrowing on one asset |
| Action pauses | Operations | Any of: collateral deposits and withdrawals, borrowing, repaying, liquidations, lender deposits and withdrawals |
| Emergency shutdown | Governance only | Collateral deposits and withdrawals, borrowing, and lender deposits and withdrawals. Repaying stays open. |

## Why breakers protect you

- **The utilization cap** keeps cash available for lenders who want to leave.
- **The Junior minimum** keeps a layer of first loss capital in front of Senior.

- **The liquidation pause** stops a lender from exiting just before a loss is booked and leaving it to others.
- **Stale price pauses** stop the protocol from lending or liquidating on a price that may be wrong.