Risk Framework
The OptyFi Protocol seeks to address risk in a well-structured and quantifiable manner. In practice, risk constraints are applied at the Vault level (on chain) and restrict which strategies a Vault can or cannot execute.
Each Protocol Vault is assigned a Risk Profile which determines the strategies the Vault can execute.
Risk Profile | Financial Risk | Protocols | Assets Permitted |
|---|---|---|---|
SAVE | No Financial Loss Should Occur | Established Protocols | Stable Coins or Large Cap Assets |
EARN | Minimal Financial Impermanent Loss May Occur | Established Protocols | Stable Coins or Large Cap Assets |
INVEST | Limited Drawdowns May Occur | Established and Newer Protocols | Also allow Newer, Lower Cap Assets |
Partner Vaults (deployed for DAO's and Crypto Funds etc) feature highly customizable risk configurations.
Partner Vault owners can chose to specify any or all of the following:
- whitelisted protocols, pools and/or strategies
- blacklisted protocols, pools and/or strategies
- minimal TVL values for pools
- pool types: single-asset, pegged multi-asset, volatile multi-asset
- borrow enabled, swap enabled
Based on the constraints specified, the Partner Vault will only be able to execute a subset of the strategies from OptyFi's Strategy Graph.
OptyFi's AI Engine will continuously optimize from within this subset of strategies, rebalancing and harvesting at an optimal frequency.
Last modified 22d ago