Protocol Health

Before entering any position in SPAI Finance, assess these key metrics to understand current protocol state and risk level.

Primary Health Indicators

1

TWAP (Time-Weighted Average Price)

Most Important Metric - Shows spBNB:BNB peg status:

TWAP Range	Status	Action
1.05-1.10	Strong expansion	Consider entry, watch IL
1.01-1.05	Healthy expansion	Optimal entry zone
0.99-1.01	At peg	Safe but no expansion
0.95-0.99	Below peg warning	Reduce exposure
0.90-0.95	Significant depeg	Exit most positions
<0.90	Critical depeg	Emergency exit

Where to check: Protocol dashboard, DEX price feeds

How often: Daily minimum, multiple times during volatility

2

Treasury Backing Ratio

Sustainability Metric - Treasury assets / circulating spBNB:

Backing	Status	Implication
>110%	Excellent	Strong expansion capability
105-110%	Very Good	Healthy operations
100-105%	Adequate	Sustainable but tight
95-100%	Concerning	Limited expansion
<95%	Critical	Sustainability questions

Where to check: Protocol treasury dashboard

How often: Weekly minimum

3

Total Value Locked (TVL)

Confidence Metric - Total capital in protocol:

Growing TVL:

• ✅ Confidence increasing

• ✅ More users entering

• ✅ Network effects building

• ✅ Protocol gaining traction

Declining TVL:

• ❌ Confidence decreasing

• ❌ Capital fleeing

• ❌ Possible issues emerging

• ❌ Warning sign

Critical threshold: >10% TVL decline in 24 hours = major red flag

Where to check: DefiLlama, protocol dashboard

How often: Daily

Secondary Health Indicators

1

Liquidity Depth

Deeper liquidity = harder to break peg:

• spBNB/BNB pool: Should be >$1M for stable protocol

• SPAI/BNB pool: Should be proportional to SPAI market cap

• Total liquidity: Higher is better for all metrics

Check: DEX analytics (DexScreener, DexTools)

2

Trading Volume

Volume indicates activity and arbitrage:

• High volume: Active arbitrage, healthy peg

• Low volume: Manipulation risk, stale prices

• Ratio check: Volume should be 5-20% of liquidity daily

Check: DEX analytics

3

SPAI Price Trend

SPAI reflects market confidence:

• Rising SPAI: Protocol success priced in

• Stable SPAI: Confidence maintained

• Falling SPAI: Concerns emerging

Check: DEX charts, technical analysis

4

PSM Fee Rate

Current fee shows protocol stress:

• Lower than 30%: Strong conditions, protocol confident

• At 30%: Normal baseline

• Higher than 30%: Stress conditions, need support

Check: Protocol UI before claiming

5

Expansion History

Recent expansion patterns matter:

• Consistent expansion: Healthy demand

• Intermittent expansion: Normal fluctuation

• No expansion: Demand issues or at peg

• Rapid expansion: Possible overheating

Check: Protocol epoch history

Combining Indicators

Healthy Protocol

• ✅ TWAP: 1.01-1.05

• ✅ Backing: >105%

• ✅ TVL: Growing or stable

• ✅ Liquidity: Deep and growing

• ✅ Volume: Consistent, 10-15% of liquidity

• ✅ SPAI: Uptrend or stable

• ✅ PSM Fee: 25-30%

• ✅ Expansion: Regular and consistent

Verdict: Safe to farm, good entry point

Warning Signs

• ⚠️ TWAP: 0.95-0.99 (below peg)

• ⚠️ Backing: 100-105% (tight)

• ⚠️ TVL: Declining slowly

• ⚠️ Liquidity: Stable but not growing

• ⚠️ Volume: Decreasing trend

• ⚠️ SPAI: Sideways to down

• ⚠️ PSM Fee: 35-40% (elevated)

• ⚠️ Expansion: Irregular

Verdict: Caution, reduce position size, monitor closely

Critical Risk

• 🚨 TWAP: <0.95 (significant depeg)

• 🚨 Backing: <100% (underwater)

• 🚨 TVL: Dropping >10% daily

• 🚨 Liquidity: Rapidly declining

• 🚨 Volume: Panic selling

• 🚨 SPAI: Breakdown confirmed

• 🚨 PSM Fee: >45% (maximum support)

• 🚨 Expansion: Halted completely

Verdict: Exit immediately, avoid new entries

Creating Your Dashboard

Track these metrics in one place:

Option 1: Manual Spreadsheet

• Tab 1: Current metrics snapshot

• Tab 2: Historical tracking (daily entries)

• Tab 3: Alerts and thresholds

• Tab 4: Position tracking

Option 2: Portfolio Trackers

Use DeBank or Zapper:

• Auto-tracks position value

• Shows IL in real-time

• Alerts for price changes

• Mobile app for monitoring

Option 3: Custom Alerts

Set up notifications:

• Price alerts (TWAP below 0.95)

• TVL alerts (drop >10%)

• SPAI price alerts

• Discord/Telegram bot alerts from protocol

Daily Checklist

Quick 2-minute health check:

• Check TWAP (green/yellow/red?)

• Check TVL trend (up/flat/down?)

• Scan any protocol announcements

• Note any unusual price action

• Confirm position value roughly as expected

If all checks pass → Relax, everything normal If any concerns → Dig deeper into specific metrics

Weekly Deep Dive

Spend 15-30 minutes:

• Calculate actual IL vs expected

• Review backing ratio trend

• Analyze SPAI price chart (technical analysis)

• Compare to similar protocols

• Assess overall crypto market conditions

• Review APR trends (increasing/decreasing?)

• Check for protocol updates or news

• Rebalance if needed

Red Flags to Never Ignore

Immediate action required:

1

Peg breaks below 0.90 — Exit most/all positions

2

TVL drops >20% in 24 hours — Capital flight, exit

3

Smart contract exploit reported — Stop everything, assess

4

Team communication stops — Possible rug/abandonment

5

Backing ratio falls below 95% — Sustainability crisis

6

Competitor succeeds dramatically — May steal liquidity

7

Broader market crashes — All algo synthetics at risk

Don't rationalize red flags - they exist for a reason.