Raising the Theta Vault Cap

Today we are excited to announce that we are raising the ETH Theta Vault Cap to 5000 ETH, from the previous 1000 ETH 🎉

Second Audit

We recently completed a second code audit with ChainSafe. See the full report here. With this audit, we are more confident on the smart contract security of the Theta Vault. The main changes we made are:

• Updated the RibbonCoveredCall contract to have a 1 hour withdrawal window which users can withdraw their funds out of the contract. This is used in the event the manager is compromised and sets the vault to mint malicious oTokens.

• Addressed a potential issue with the vault doubling its share supply. This bug would have taken place in an emergency scenario where the manager closes the short prematurely.

Refining Operations in Prod

We have refined the operations of the Theta Vault, which should lead to better manager strike selection. We shortened the time between strike selection and option sales from 24 hours to < 3 hours.

This helps to mitigate the issue where price could move dramatically within the 24 hours, and the strike that was selected might lead to too much risk or too low yield.

Conclusion

With these changes, we feel comfortable raising the Theta Vault cap from 1000 ETH to 5000 ETH. The Ribbon team is getting one more audit (#SecurityFirst) and would like to run the system in production for a few more weeks before raising the cap once again.

Thank you for your patience and support!