# Deposit Caps

A Deposit Cap (technically referred to as the **Total Supply Cap**) is a core security and risk management parameter that defines the maximum number of shares a Fusion Vault can issue. It serves as a vital circuit breaker to limit protocol exposure and protect vault participants from specific attack vectors.

## Overview

In IPOR Fusion, the Deposit Cap is enforced at the share-minting level. By limiting the total supply of shares, the Atomist indirectly controls the maximum Total Value Locked (TVL) in the vault.

Every vault should ideally be configured with a deposit cap that aligns with the strategy's current liquidity capacity and the desired risk profile.

## Security Rationale

Setting an appropriate cap is a primary defense mechanism against several DeFi risks:

### 1. Mitigating Flash Loan and Share Price Attacks

Vaults that offer **instant deposits and redemptions** without charging an onboarding/offboarding contribution (entry/exit fees) are potentially vulnerable to share price manipulation.

* **The Vector:** An attacker could use a flash loan to significantly inflate the vault's assets or manipulate external price feeds used by balance fuses. If they can enter and exit in the same block for free, they can exploit temporary discrepancies in share price calculation.
* **The Defense:** While [Redemption Delays](/build-on-fusion/atomists/curating-a-fusion-vault/managing-redemption-delays.md) are the primary defense against same-block attacks, a **Deposit Cap** bounds the maximum potential impact. It ensures that even if a manipulation is attempted, the attacker cannot use an unlimited amount of capital to exploit the vault's share price calculation.

### 2. Strategy Capacity and Liquidity Management

Many DeFi protocols have finite liquidity. If a Fusion vault grows too large for its underlying protocol integrations, it may suffer from excessive slippage during rebalancing or be unable to exit positions quickly during market stress. A cap ensures the vault stays within the "sweet spot" of the underlying strategy's liquidity.

### 3. Risk Contamination

In the early stages of a new strategy, a cap allows the Atomist to observe the performance and oracle stability with a controlled amount of capital before scaling up.

## Technical Implementation

### Role Requirements

Only accounts with the `ATOMIST_ROLE` are authorized to modify the supply cap.

### Setting the Deposit Cap

The cap is set using the `setTotalSupplyCap` function within the `PlasmaVaultGovernance` contract:

```
function setTotalSupplyCap(uint256 cap_) external restricted;

```

**Important Note on Denomination:**

Unlike many other protocols, the cap in IPOR Fusion is denominated in **Shares**, not underlying assets. Because the share price increases over time as yield accrues, the asset-equivalent value of a fixed share cap will also increase.

The precision of shares is calculated as:

$$Share\ Decimals = Underlying\ Asset\ Decimals + 2$$

### Management Interface

Atomists can manage these limits through the IPOR Fusion Web App in the Vault Management section.

1. Navigate to the **Curation** tab of your vault.
2. Locate the **Vault Limits** section.
3. Enter the new cap value in the underlying asset denomination (the UI automatically handles the conversion to share decimals for the transaction).
4. Execute the transaction.

## Best Practices for Atomists

### 1. The Inverse Relationship with Delays

The importance of a strict deposit cap is inversely proportional to your **Redemption Delay**. If your vault has a `redemptionDelay` of 0 and no entry/exit contributions, a tight cap is your absolute primary line of defense against share price manipulation.

> For more information on managing waiting periods, see [Managing Redemption Delays](/build-on-fusion/atomists/curating-a-fusion-vault/managing-redemption-delays.md).

### 2. Frequency of Balance Updates

The enforcement of the cap happens during the `deposit` and `mint` flows. However, the calculation of available "headroom" depends on an accurate share price.

**Reminder:** Atomists must ensure that `updateMarketsBalances` is called regularly (manually or via keepers). If market balances are stale, the share price might be incorrect, leading to a cap enforcement that doesn't reflect the true value of the vault.

### 3. Strategy Capacity Monitoring

Regularly monitor the capacity of the underlying strategy. If the integrated protocols or pools reach their own liquidity limits, the Fusion vault's cap should be adjusted accordingly. While the cap can be increased as the strategy demonstrates deeper liquidity, it should be lowered if market conditions change or if protocol limits are reached to maintain desired slippage parameters.


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