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OPERATIONAL_REQUIREMENTS.md

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Operational Requirements

This document describes operational requirements for deploying and managing integrations with the Spark ALM Controller.

Protocol Seeding Requirements

Certain protocols require initialization before the ALM Controller can safely interact with them.

ERC-4626 Vault Seeding

Requirement: All ERC-4626 vaults MUST have initial burned shares.

Aspect Details
Purpose Prevents rounding-based frontrunning attacks
Implementation Initial shares must be minted and burned (sent to zero/dead address)
Permanence Burned shares must be unrecoverable

Additional Protection: Donation attacks are protected against with the maxExchangeRate mechanism.

Attack Prevented: Without burned shares, an attacker could:

  1. Deposit minimal amount to get shares
  2. Donate assets directly to vault to inflate share price
  3. Exploit rounding when victim deposits to steal funds

Curve Pool Seeding

Requirement: Curve pools must be seeded with initial liquidity before use. Seeding must be done to an unrecoverable address (e.g, address(1)). This will prevent any unintended behaviours.

Uniswap V4 Pool Seeding

Requirement: Uniswap V4 pools must be seeded with initial liquidity before use. Seeding must be done to an unrecoverable address (e.g, address(1)). This will prevent any unintended behaviours.

Token Requirements

All ERC-20 tokens used with the ALM Controller must be:

Requirement Rationale
Non-rebasing Rebasing tokens cause accounting inconsistencies
≥6 decimals Prevents precision loss in rate limit calculations
Standard ERC-20 Non-standard implementations may cause unexpected behavior

Rate Limit Configuration

  • Rate limits must be configured for each specific integration
  • Unconfigured integrations will revert on interaction
  • Rate limit keys act as a whitelist (see Rate Limits)

Withdrawal Dependencies

Withdrawal Function Required
withdrawERC4626 Non-zero deposit rate limit for same vault
redeemERC4626 Non-zero deposit rate limit for same vault
withdrawAave Non-zero deposit rate limit for same aToken

OTC Buffer Deployment

When deploying a new OTC buffer:

  1. Deploy the OTCBuffer contract
  2. Critical: initialize the contract to set up the access controls and set infinite allowance (type(uint256).max) to the ALMProxy
  3. Configure the OTC buffer address in the controller
  4. Set appropriate rate limits and slippage parameters

Failure to set infinite allowance will cause OTC swap completions to fail.

Uniswap V4 Pool Onboarding

Asset Restrictions

Only pools with 1:1 assets can be onboarded:

  • USDC/USDT ✓
  • USDC/DAI ✓
  • USDC/USDS ✓
  • USDC/ETH ✗ (different underlying)
  • USDC/WBTC ✗ (different underlying)

Onboarding Process

  1. Verify pool contains only whitelisted 1:1 stablecoins
  2. Verify pool does not have dangerous hooks
  3. Configure rate limits for the specific pool
  4. Configure tick limits for the specific pool
  5. Set appropriate slippage parameters

General Onboarding Process

  1. Verify protocol compatibility with ALM Controller requirements
  2. Configure rate limit keys via governance
  3. Set safety parameters if applicable
  4. Test on fork before mainnet deployment
  5. Monitor initial operations closely after deployment

Monitoring Recommendations

Integration Monitor
All Rate limit utilization, transaction failures
UniswapV4 Pool price
ERC-4626 Exchange rate changes, share price manipulation
OTC Outstanding swap amounts, recharge progress
weETH Pending withdrawal NFTs, finalization delays
CCTP/LayerZero Bridge confirmation times, stuck transfers
Ethena Pending mint/burn operations, delegated signer status