> ## Documentation Index
> Fetch the complete documentation index at: https://docs.nilemarkets.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Operating Modes

> Four operating modes control what actions are available — NORMAL (all operations), DEGRADED (no new positions), REDUCE_ONLY (close-only), PAUSED (emergency halt) — triggered by oracle health.

The protocol operates in one of four modes at any given time. Modes control which operations you can
perform, providing a graduated response to oracle issues, market conditions, and emergencies.

## The Four Modes

<Columns cols={2}>
  <Card title="Normal" icon="circle-check">
    **All operations allowed.** This is the default state. You can open and close positions, adjust
    margin, deposit and withdraw from the vault — everything works normally.
  </Card>

  <Card title="Degraded" icon="circle-exclamation">
    **No new positions.** Opening new positions and increasing existing ones are blocked. You can still
    close positions, reduce them, adjust margin, settle, and manage vault deposits. Typically triggered
    by oracle quality issues.
  </Card>

  <Card title="Reduce-Only" icon="circle-minus">
    **Same restrictions as Degraded.** Functionally identical — no new exposure can be added. Set
    manually by the admin as a stronger signal that the protocol is in a cautious state.
  </Card>

  <Card title="Paused" icon="circle-pause">
    **Everything is suspended.** No operations of any kind. This is the emergency brake, used only
    when the protocol needs to be completely halted (e.g., critical oracle failure or security incident).
  </Card>
</Columns>

## What You Can Do in Each Mode

| Operation         | Normal | Degraded | Reduce-Only | Paused |
| ----------------- | ------ | -------- | ----------- | ------ |
| Open position     | Yes    | No       | No          | No     |
| Increase position | Yes    | No       | No          | No     |
| Close position    | Yes    | Yes      | Yes         | No     |
| Reduce position   | Yes    | Yes      | Yes         | No     |
| Add margin        | Yes    | Yes      | Yes         | No     |
| Remove margin     | Yes    | Yes      | Yes         | No     |
| Vault deposit     | Yes    | Yes      | Yes         | No     |
| Vault withdraw    | Yes    | Yes      | Yes         | No     |

<Note>
  Adding margin is always permitted in non-Paused modes, even in Degraded and Reduce-Only. This ensures
  you can rescue a position from liquidation regardless of the protocol mode.
</Note>

## How Mode Changes Affect You

<Tabs>
  <Tab title="Normal → Degraded/Reduce-Only">
    **Impact:** You cannot open new positions or increase existing ones. All other operations continue
    normally.

    **What to do:** Monitor the protocol status. If you have open positions approaching liquidation,
    you can still add margin. If you want to reduce risk, you can close or reduce positions.
  </Tab>

  <Tab title="Normal → Paused">
    **Impact:** All operations are suspended. You cannot interact with the protocol at all.

    **What to do:** Wait for the admin to unpause. Your positions, margin, and vault shares are safe —
    they are stored onchain and will be accessible when the protocol resumes.
  </Tab>

  <Tab title="Return to Normal">
    **Impact:** All operations resume. You can open new positions and manage existing ones as usual.

    **What to do:** Check your positions. If prices moved significantly during the restricted period,
    your equity may have changed.
  </Tab>
</Tabs>

## Why Modes Exist

Modes protect you and the protocol from operating with bad data or during emergencies:

* **Oracle issues:** If forward prices become stale or invalid, the protocol blocks new positions to
  prevent trades at incorrect prices
* **Market emergencies:** During extreme volatility, the admin can restrict operations to protect the
  pool and existing positions
* **Security incidents:** The Paused mode provides a complete halt for investigation and remediation

<Tip>
  The current protocol mode is visible on the trading interface. When the protocol is in Degraded or
  Reduce-Only mode, the "Open Position" form is disabled with an explanatory message.
</Tip>

For the complete mode transition rules, state machine diagram, and auto-escalation logic, see
[Mode Escalation](/protocol/mode-escalation).