Chain Assumptions

Blockchain requirements and assumptions for Reserve Folio deployment

Overview

Reserve Folio is designed to work on EVM-compatible chains that meet specific requirements. Understanding these assumptions is critical for safe deployment and operation.

Block Time Requirements

Maximum Block Time: 30 seconds

The chain is assumed to have block times equal to or under 30 seconds.

This assumption affects:

• Auction timing precision
• Fee accrual calculations
• Timelock delay effectiveness
• Rebalance TTL behavior

Deploying on chains with block times exceeding 30 seconds may result in:

• Imprecise auction pricing
• Suboptimal execution timing
• Fee calculation drift

Compatible Chains

Reserve Folio is compatible with chains that meet these criteria:

1. EVM Compatibility

   Must be fully EVM-compatible with standard Solidity contract support

2. Block Time

   Block time ≤ 30 seconds (see above)

3. Block Timestamp Reliability

   Block timestamps must be reasonably accurate and monotonically increasing

4. Standard Token Support

   Must support standard ERC20 token implementations

Supported Networks

Ethereum Mainnet

Block Time: ~12 seconds

Status: ✅ Fully supported

Base

Block Time: ~2 seconds

Status: ✅ Fully supported

Arbitrum

Block Time: ~0.25 seconds

Status: ✅ Fully supported

Optimism

Block Time: ~2 seconds

Status: ✅ Fully supported

Polygon

Block Time: ~2 seconds

Status: ✅ Fully supported

The protocol can theoretically work on any EVM chain meeting the requirements, but the above networks are the most commonly targeted.

Timing Considerations

Auction Timing

Auction prices decay continuously based on block timestamps:

// Price calculation based on timestamp
function getBid(
   uint256 auctionId,
   IERC20 sellToken,
   IERC20 buyToken,
   uint256 timestamp,
   uint256 maxSellAmount
) external view returns (uint256 sellAmount, uint256 bidAmount, uint256 price);

The first block may not have a price of exactly startPrice if it does not occur on the exact start timestamp. Similarly, the final block may not hit exactly endPrice.

Fee Accrual

Fee Inflation: Every 24 Hours

Starting with version 4.0.0, fee inflation is accounted for every 24 hours rather than every block.

This change:

• Has no performance impact
• Is equivalent to previous per-block behavior
• Allows for more flexibility
• Reduces gas costs

Timelock Delays

Governance timelocks rely on accurate block timestamps:

Slow Folio Governor (DEFAULT_ADMIN_ROLE)

Expected to have a substantial timelock delay for security.

Block time affects the precision of when operations can be executed after the delay.

Fast Folio Governor (REBALANCE_MANAGER)

May have a shorter timelock for operational agility.

Still relies on accurate timestamps for delay enforcement.

Rebalance TTL

Time-to-Live

Rebalances have a TTL that controls how long they can run.

Important: An auction can be opened at ttl - 1 and run beyond the rebalance’s TTL.

Block time affects when exactly the TTL expires.

Block Timestamp Assumptions

Monotonically Increasing

Block timestamps must always increase or stay the same (never decrease).

This is a standard blockchain assumption enforced by consensus rules.

Reasonable Accuracy

Timestamps should be within a few seconds of actual wall-clock time.

Large deviations could affect:

• Auction pricing accuracy
• Fee calculations
• Rebalance timing

No Manipulation

Block producers should not be able to manipulate timestamps significantly.

Most PoS chains have strict timestamp validation rules.

Gas and Transaction Considerations

Gas Prices

MEV Considerations

On networks with high MEV activity, auction participants need to consider:

• Gas price volatility
• Transaction ordering
• Front-running risks

The AUCTION_LAUNCHER role helps mitigate some MEV risks through trusted filler integration.

Transaction Finality

Consider transaction finality guarantees on the target chain:

• L2s typically have fast finality
• Ethereum mainnet has longer finality (12-15 minutes)
• Auction participants should account for reorg risks

Dependencies

RoleRegistry

The protocol depends on an existing RoleRegistry instance:

interface IRoleRegistry {
  // Must adhere to this interface
  // See contracts/interfaces/IRoleRegistry.sol
}

External Price Feeds

While not strictly required, many Folios rely on external price feeds for:

• Setting initial price ranges
• Monitoring for price excursions
• Validating auction results

Price feed availability and reliability vary by chain.

Deployment Checklist

1. Verify Block Time

   Confirm the target chain has block times ≤ 30 seconds.

   Check recent blocks to verify consistent timing.

2. Test Timestamp Behavior

   Deploy test contracts and verify timestamp behavior matches expectations.

3. Verify RoleRegistry

   Ensure a compatible RoleRegistry is deployed on the target chain.

4. Test Token Compatibility

   Verify all intended collateral tokens work correctly on the target chain.

   Some tokens behave differently across chains.

5. Configure Governance Delays

   Set appropriate timelock delays based on chain block times.

   Faster block times may allow for shorter delays while maintaining security.

6. Test Auction Mechanics

   Run test auctions to verify timing and pricing behavior.

Chain-Specific Considerations

Ethereum Mainnet

Pros:

• Highest security and decentralization
• Most established ecosystem
• Best liquidity

Cons:

• High gas costs
• Slower finality
• High MEV activity

Layer 2s (Arbitrum, Optimism, Base)

Pros:

• Much lower gas costs
• Faster block times
• Fast finality

Cons:

• Depends on L1 for security
• Potential centralization in sequencer
• Withdrawal delays to L1

Sidechains (Polygon)

Pros:

• Very low gas costs
• Fast transactions

Cons:

• Separate security model
• Bridge risks
• Different validator set

Performance Expectations

Expected performance on supported chains:

Chain	Auction Price Update Frequency	Fee Accrual Precision	Typical Gas Cost
Ethereum	Every ~12 seconds	High	High (over $50)
Base	Every ~2 seconds	Very High	Low (under $1)
Arbitrum	Every ~0.25 seconds	Extremely High	Very Low (under $0.50)
Optimism	Every ~2 seconds	Very High	Low (under $1)
Polygon	Every ~2 seconds	Very High	Very Low (under $0.10)

Faster block times provide more granular auction pricing and better execution, but the protocol is designed to work well on all supported chains.

Related Documentation

Deployment

Deployment guide and scripts

Rebalancing

How timing affects rebalancing

Audits

Security audits and chain-specific findings