Simulated Market Stress Testing

Simulated market stress testing involves subjecting a protocol to extreme, artificial market conditions to evaluate its resilience. This includes testing how the system handles high volatility, massive liquidation events, or oracle failures.

By observing how the protocol behaves under stress, developers can adjust risk parameters and margin requirements before real capital is at risk. It is a standard practice in quantitative finance applied to blockchain protocols to ensure stability.

This process helps identify hidden weaknesses in the margin engine and liquidation logic.