# Hyperdrive: Simulation Plan

The initial simulation will target a feature complete Hyperdrive implementation with agents that randomly open/close longs/shorts. This initial sim will serve as a baseline to work out implementation bugs and as a sanity check that the LP and traders PnL is explainable based on how this basic simulation is configured.

The next step is to add a new type of agent to the simulation that acts rationally. This agent should open longs/shorts that make the fixed rate market trend similar to the variable rate market. This accomplishes a few things:

1) We have said that Hyperdrive acts as a market sentiment on variable rates. As a result, the fixed rate market time history should resemble the variable rate market.
2) In order for the Hyperdrive fixed rate to react to or even anticipate changes in the variable rate market, we need to tune the model's parameters to support this behavior (specifically the time stretch param). If we assume 500 million of liquidity and somewhere between 10 and 50 million in trading activity/day, then we need to find the time stretch parameter that is low enough so that the fixed rate market can react to sudden DSR changes in a timely manner AND is high enough so that it supports the total price discovery (DSR can be anywhere from 0 to 6%) required of the AMM.
3) We need to demonstrate that a rational fixed rate market is profitable for the rational trader AND profitable for the LP that facilitates the trading