> For the complete documentation index, see [llms.txt](https://docs.paragon.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.paragon.trade/markets/rates-and-yields/off-hours-and-fallback.md).

# Off Hours & Fallback

Rates perpetuals trade on Hyperliquid around the clock, but their external sources publish only during covered [sessions](/markets/rates-and-yields/external-pricing.md). Whenever no source is publishing — overnight, weekends, and [market holidays](/resources/holiday-closures.md) — Paragon switches to an internal pricing mechanism, then snaps back to external pricing once a source returns.

With no live source to track, the oracle steps forward from its last value by a fraction of the order book's **impact price difference (IPD)** — a read on where resting liquidity sits relative to the current oracle value `S`:

$$
\text{IPD} = \max(P\_{\text{impactBid}} - S,\ 0) - \max(S - P\_{\text{impactAsk}},\ 0)
$$

`P_impactBid` and `P_impactAsk` are the average fill levels for a fixed impact notional swept across the bid and ask sides of the book. A rates book is quoted in yield, so both terms and the resulting IPD carry the same units as the index.

The oracle advances as a continuous-time exponentially weighted moving average with time constant **τ = 30 minutes**, which keeps it stable across irregular updates and halts:

$$
S\_t = \beta\_t, S\_{t^-} + (1 - \beta\_t), x\_t, \qquad \beta\_t = \exp!\left(-\frac{\Delta t^{\*}}{\tau}\right), \qquad x\_t = S\_{t^-} + \text{IPD}\_t
$$

where $$\Delta t = t - t\_{\text{prev}}$$, $$\Delta t^{*} = \min(\Delta t,\ c\tau)$$, and $$c = 0.1$$. Capping $$\Delta t^{*}$$ holds any single step to at most $$1 - e^{-0.1} \approx 9.5%$$ of the move toward $$x\_t$$, so long gaps between updates can't jolt the oracle.

When coverage drops, the mechanism seeds from the last externally published value; when it resumes, the oracle reverts to the external value on the next tick.

Rates markets currently spend more of the week on this mechanism than other Paragon market types. Price discovery through the gap is therefore driven by the market's own order book, and the first external value of a session may sit some distance from where the mechanism carried the oracle. Both effects diminish as coverage widens.

## Bounds

Off-hours, the mark is hard-capped to the market's [Bounds](/trading/bounds-and-anchors.md), measured from the last externally published value. Per-market values are listed in the [Contract Specifications](/resources/specifications.md#market-specifications).


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