Please keep in mind that all your positions and automation strategies should come as a result of your own risk assessment. In particular, for the Constant Multiple feature, the values for the buy and sell triggers should be chosen in such a way that your position’s risk is not increased due to unexpected market conditions or volatile prices.
If used correctly, Constant Multiple can be a powerful tool to help you maximize your profits without lifting a finger! However, there are some risks that you should understand before using it:
- Recurring Sell actions in a downtrending market could increase your exposure to an asset whose value is falling, and the value of the asset could then rise. This would result in you ‘selling the bottom’ and losing money.
- Recurring Buy actions increase your exposure in an uptrending market, and the value of the asset could then fall. This would result in you ‘buying the top’ and losing money.
As with all our automation features, there are other implied risks, including but not limited to:
- Oracle manipulation: The triggers are based on the next Maker Oracle price, so if a bad actor can somehow manipulate this value, it can potentially affect your position by forcing a buy or sell operation on your Vault.
- Price volatility: Maker Oracles update every hour, but the buy and sell price of the collateral is based on spot price, which changes in real-time. This can potentially make the Constant Multiple trading prices not optimal.
- Unknown exploits: Oasis.app smart contracts have been through security audits. However, it is impossible to guarantee that the contracts are 100% safe against attacks.